NYX GAMING GROUP LTD 11 PCT DEBS V.NYX.DB

RE:RE:RE:RE:RE:RE:Jerome Hass will probably buy it back in 2017

[stocksnbonds]

Invest4000, I don't doubt Matt's wanting the firm to succeed. I think we all agree he's done a pretty remarkable job growing the company. I don't have any issues with that. If you recall, I was the first onboard here with the OB purchase. It was transformative and will drive new licensee growth as the main verticle, much bigger than casino. I was posting about the benefits of the OB purchase on the weekend UK news reports even before NYX announced it. My posts are clear. 

The issue I have is with the cost increases. I understand NYX needs to absorb costs with purchases. They simply need to shed as well to make the purchases viable. Remember the OnGame fiasco? NYX finally sold OnGame for a loss just to dump the personnel costs. It was not able to reach economies of scale in Europe. It was costing about 3MM/quarter. What a waste !

If you remember, NYX was not profitable even before the OB purchase. This shows that Matt and his team did not cut company costs properly after the Chartwell and Cryp purchases. Positions there could have been cut and much sooner. I'm not looking to cut off the firm's arms or legs, just fat around certain acquisitions. The fact that costs were not cut after those purchases made me concerned. Now after the OB acquisition, I'm even more concerned. NYX has the critical mass it needs to be profitable. a 5-10% cut in personnel is not unreasonable after all the growth. 

NYX is currently over 1100 staff including all OB staff. The firm is growing, Matt and his team are getting paid nicely. Now, it's time for retail investors to gain after the losing years of NYX being public. 

As mentioned earlier, if NYX costs level off or decrease even slightly, with a 20-30% increase in organic revenue, NYX will have turned the corner on profitability. There's absolutely no excuse for NYX to not be profitable Q4. I'm looking to see 5-7 million in actual profits given my revenue projection as well as increases in EBITDA and free cash flow. The profit needs to start servicing debt. I'm very tired of having the share count diluted from these silly "piggy back" financing deals. Those need to stop. Haas was right on that front.   

Good luck this year,

sb