Analyst CoverageEveryone can interpret the recent analyst coverage however they want. I personally do not disagree and encourage people to review the financials including sections like liquidity and credit risk. The risks outlined by analysts are very real
A simpleton analogy for me is:
Your parents give you a potfull of money. You run out and buy nice shiny toys and start a business. You go to the bank and get a big mortgage/ Your not concerned because you have cash in the bank and you think your future is bright. Your lender believes in the future potential of your business and says we're giving you the money but here's our conditions......... if you dont meet those conditions we want our money back.
All of your friends bought into your business.........
You went out and hired abunch of employees and signed expensive leases.Your parents keep giving you money but alas......they stop. They say.......we dont believe in your business potential as much as we used to you've also raised a lot ofmoney already.
Your costs to keep your business running is $20,000 per month. You are only making making $10,000 per month but stull have $60,000 in the bank. You will be broke in 6 months unless something changes.
Your bank now tells you that your not meeting the conditions and want to be paid out
- Getting money from parents will be very difficult ...their not into you anymore
- Banks will be leary since you couldnt meet your conditions and are not making as much as what you thought,
- Your friends are all pissed at youas the value of their investment has eroded
Now what? You find people that are willing to invest (vultures and loan sharks). They make sure they will get a good return / deal. They dont care about the money your parents and friends invested and will make the value of their original investments much less by virture of the only deal they are willing to make to bail you out.
You think long and hard:
- can I do more sales and increase my income to cover my expenses
- can I reduce my costs to be in line with my income?
- if i do the above can I negotiate with my bank (they'll probably double my interest)
or do I do a deal with the devil because the above does not work. My parentsand friends will be pissed about losing a big chunk of money but at least the business will continue and they may get a fractional return in the future.
Big decisions ahead for ACB. There is another quarter of pain coming in my opinion. Capital markets will be dry for this sector.
Very remincent of the teck reck and over capacity on fibre optics for me. Lost a boat load of money. Many companies emerged but many lost.
I'm not bashing this stock. just being real and looking to be a bottom feeder should ACB need to excercise life linesand I see a future for them. The industry will grow for sure.
I;m thinking we are 60 to 90 days away from bottom provided there is a life line or drastic change in revenue/expenses.
As usual do your own due diligence.
GLTA