RE:v-g $ 1.29 post of 03/13/2022 They paid $150 million to acquire ETC. Shareholders put in $75 million or 0.64 / share of cash. The other half was financed by debt. And at the price paid it was full value. You can't magically turn $0.64 into $2.00 because you want it to be worth that.
Shareholders take the downside and upside on future growth or in multiple compression. It was a leveraged bet at 10-12X multiple.
ITS companies are now trading at 7x EBITDA (YES it is E BIT DA... not E PIT DA).
If the earnings are at the low end of $12.5Million as per the original announcement, the shareholder equity in the ETC business is worth $15 million. In other words if we had to sell now at today's multiple, the original $75M cash infusion would be worth $15M net of the debt we would have to pay. If earnings are below estimates than all of the shareholder equity is wiped out.
Leverage is great when you buy things cheap and they increase in value. Not the same when you buy things at the higher end of valuations and margins and multiples compress in tandem.
It hurts even more when all if that happens and your former cash cow (WiLan) becomes lame. And John G is doing to what dairy farmers do to their lame cows... he is selling them to BIG FAST FOOD (Big Tech) for burger meat (patents).