Telit Communications Share Discussion Threads

[sphere25] 02/2/2017 21:15

Right new news so I will comment:

$8m for a company that will result in:

"negative impact on the adjusted EBITDA by some $4 million"

Are they using this company to cover up the lack of real profit? All speculation on my part, but this looks a suspicious acquistion (with more and more borrowed money).

Oozi Cats but Oozi no cash, the market is onto you. Sell your stock at this bonkers valuation whilst you still can ;-)

Keep shorting.

All imo

[muffster] 01/2/2017 08:00

Extending debt.

[bazildonbond] 01/2/2017 07:32

I wonder where the CASH came from, earnings perhaps. ;-)

[owenski] 01/2/2017 07:29

Those short positions still remain at 9.74%

[this_is_me] 01/2/2017 07:21

That looksw like a good, long term, deal.

[arcadian] 18/1/2017 11:54

It`s not clear. I`ve got Joanna looking into it. Will post her findings if she `phones back.

No call re explanation by 4pm

[technovator] 18/1/2017 08:07

Has Goldman Sachs just sold 3%?

[jitters3] 17/1/2017 10:15

Just bought in for a trade let the short squeeze commence please

[this_is_me] 13/1/2017 11:59

How far could a short squeeze bounce these up to?

[bazildonbond] 11/1/2017 14:44

I shudder to think what Enismore's exposure is in Telit, or the others for that matter, who will blink first i wonder?

[sphere25] 11/1/2017 13:45

Bazildon,

I am being transparent and it isn't like any bulletin board poster can influence a stock. You should be happy - the stock is rallying despite the shorts - bodes well short term for a potential squeeze.

Homey,

Np.

Some decent points there and the market agrees with you at the moment. I'm not convinced and will wait till the accounts come out.

Blatantly obvious the trend is up, and if the shorts don't continue adding in size to stop a rise, a vicious squeeze (illiquid stock) higher will be forthcoming. That's why I'm not going gung ho on the short front. Prefer to see that trend reverse before adding bigger positions.

And if that squeeze does happen, I will add short-term long positions too. We're all here to make money regardless of the short-term direction of a stock. But all said and done, at some point I still feel the market will take a much closer look at the fundamentals of this stock.

And finally (last post before results), it takes two to make a market, so good luck Homey and other bulls.

[this_is_me] 11/1/2017 09:20

Excellent update. I particularly liked:

"Based on the positive cash generated and our committed credit line, we will continue to seek acquisitions to strengthen and broaden our product lines and IoT services capabilities."

The best way to own shares is via a personal member of CREST. That way your broker can't loan them out for someone to use to short thereby pocketing the fee and pushing the value of the shares down. Remember that if shares are in a nominee account you don't actually own them.

[homeytheclown] 11/1/2017 08:57

Sphere25

Thanks for responding.

To say that cash generation is non-existent is unfair. Net debt was reduced by $10.4M. If you add the $3M dividend, you get $13.4M which is a good result for 6 months. I fail to see a cash flow issue here. A business like Telit has product cycles that may require initial significant capital and then will reap the reward at a later date. The old saying, “you have to spend money to make money” is very relevant to Telit. If Telit had concerns with cash flow, they could suspend the dividend, furthermore they would not make statements like "Based on the positive cash generated and our committed credit line, we will continue to seek acquisitions to strengthen and broaden our product lines and IoT services capabilities." I have been following Telit for 4 years and at no point did I see a cash-flow/financing issue.

As for the number of parties with open short positions, I am quite comfortable to bet against them as I don’t subscribe to a herd mentality. It will be interesting to see how high the open short positions can get to. At some point, the available shares to short become more difficult to find. If and when one or more parties choose to close their short positions it could place significant upward pressure on the share price, a situation I would not like to be in, especially with Telit who has a 30% market share of IOT modules market, a market that has and will continue to experience double digit growth into the foreseeable future.

I think that the shorting of Telit coincided with Sierra Wireless being overvalued when it reached close to $50 a share. I think you will find Telit’s current PE ratio and further future reductions in net debt to be 2 catalysts for a reduction in open short positions. If I am wrong and the shorting continues it will only magnify the eventual short squeeze.

Your observation about the increasing short positions has coincided with an increasing share price should give you some indication that this may not end well for the shorters.

Once again, thanks for replying.

[bazildonbond] 11/1/2017 06:41

Good move Sphere25, take short bets them talk it down so you can make a bob or two.

[timmy11] 10/1/2017 18:14

10-Jan-17 Canaccord Genuity Buy - 325.00 Reiteration

[sphere25] 10/1/2017 16:57

I'm adding to my short on the back of that statement. They have hit the bottom end of revenue, but most importantly the cash generation is ONCE MORE non-existent. They started the year with net cash of $1.1m, turned over $370m, produced EBITDA of $54-59m and ended the year with net debt of $18.7m (wouldn't surprise me if they window dressed the year end figure too).

You'll tell me some of the cash has been paid out as dividends and some acquisition related. Thing is: this company is valued at almost $400m (!!!) and does the same year in, year out - all those "profits" go through the working capital cycle and "investments", and never come out the bottom in adding to the cash pile in any material way.

Currency moves and a bullish market will have helped sentiment here for sure, I mean someone clearly is buying up the conventional sales, as well as the short sales, but how long before the market stops letting TCM getting away with pitiful cash generation?

Seven funds shorting (above the net 0.5%) with the shorts continually increasing. Going on past experience, that is too many for a short report to not follow (when word has been passed between these funds to get short). That will absolutely annihilate this stock imo.

I might be wrong, but I still feel you have to be abit crackers to be taking the risk here.

Sphere - short

All my opinions.

If you're a toothless moron at the FCA, don't come knocking my way, I have no idea if a short report is actually on its way ;-)

[homeytheclown] 10/1/2017 10:40

I was surprised to see the open short positions above 10% and increasing. Since mid-2016, the share price has been increasing along with the increase in short positions. I can understanding the shorting when TCM was at GBP3.50 but I find it difficult to understand why TCM is being shorted now. The short squeeze will be fun to watch. Would anyone like to justify shorting TCM?

[bazildonbond] 10/1/2017 07:46

Trading update.

[beergut] 09/1/2017 08:49

More good news on Friday with Verizon and Qualcomm deal.

[wiseacre] 22/12/2016 15:51

The shining eyes of sincerity of Oozi Cats are not to be trusted. The Accounting policies stink with profits engendered by capitalising costs and "adjusted" EBITDA. The fact the company pays a dividend when it is cashflow negative is a con-trick. No wonder this is the most shorted stock on AIM. Definitely one to be avoided; I give it six months before the stock craters.

[bulltradept] 06/12/2016 16:15

Still loving this company!