Telit Communications Share Discussion Threads

[bbmsionlypostafter] 05/12/2017 12:29

But, but, but....

The acquisitions are still on track, aren't they?

£39M raised for that purpose 7 months ago today. Obtaining money under false pretenses?



The proceeds from the Placing will be used to fund several identified acquisition opportunities, mainly in the IoT Services sector, which the Company will look to execute in the near to medium term.

[frazboy] 05/12/2017 11:46

All quiet here. Trading update due. Rights issue a definite possibility in light of the margin compression on the LTE products ( which were to be the company's saviour - slight exaggeration, i agree, but the service side of the business isn't going to be cash generative any time soon), not to mention the cash drain from the rationalisation programme. I closed my short immediately after the auction - on the update in late November - prior to the dead cat bounce and rollover. Annoyingly there's still no borrow so cannot reopen.

[tomps2] 30/11/2017 11:28

In this video Understanding Accounts by Leon Boros. TCM's cashflow statement is examined, and Leon gives his interpretation.

hxxp://www.piworld.co.uk/2017/11/30/leon-boros-understanding-accounts-interviewed-by-tamzin-freeman/

[wiseacre] 27/11/2017 20:40

A lot of small purchases from the fools who can't help themselves I guess.

[hpcg] 23/11/2017 21:21

I wasn't able to go short again, so a bit gutted. Looks like the next stage of unravel. London listed shares do not have a good history when it comes to 2nd halves making up bad 1st halves.

[sphere25] 23/11/2017 19:21

Stay short - more bad news to come.

Run Liang Tai --> Muppets
Davide Serra ---> Known muppet

Not alot else to say until we hear more negative news on fundamentals.

Sphere - short

----------------------------------------------------------------------------------
Sphere25 - 28 Sep 2017 - 06:31:36 - 6077 of 6367 Telit Communications plc - TCM
Oh dear, oh dear, oh dear! It's all starting to drip out!

The crooks are downgrading revenue and EBITDA, as well as reviewing product lines, because they're cooking the books. As for the convenant issue, this company doesn't generate free cash flow.

This bit was worth a good laugh too:

"Telit expects to see, as normal, significant cash generation in the second half of the financial year"

Been saying it's going to get ugly for a while and it will keep getting uglier for here. I am short again now, but all the signs are there to make even the dimmest wonder what is actually going on here.

All imo

[savagedstock] 23/11/2017 18:01

Pug ugly
Wonder how 5he Chinese investor feels after all that buying? And I very much doubt it's a 'kosher' investor...
Cost to borrow probably gone through the roof....so difficult to borrow to short more...
Interesting posts on what they might disclose in 2H but my hunch after 25 years of experience is that it will be break even....and huge cash outflow. I am not invested but unfortunately I used their chips in my business which turned out to be poor....got another chips supplier lined up....

[pugugly] 23/11/2017 16:15

Savagedstocks 6355 (above) "anyone who has ever watched an Israeli company on AIM should know the outcome - train crash in slow motion" Needs repeating from personal experience - Nearly as bad as many small Chinese stocks -

[bbmsionlypostafter] 23/11/2017 15:21

savagedstock,

much of the new technology is actually not needed...

I'm still trying to figure out why there is any need for smart meters to give utility companies gas & leccy readings when I can do the same thing in about 30 seconds 4 times p.a.

[frazboy] 23/11/2017 14:25

Looks to me that the borrow is off, neither IG nor city are taking short positions. IG showing 57% short last time I looked

[henchard] 23/11/2017 13:21

In today's RNS:

"We are aware of the concerns raised regarding share trading undertaken by Yosi Fait in July 2017. We have absolute confidence in his integrity and believe, having examined the share trading with the assistance of external legal advice, on this basis that it was lawful."

I too see nothing whatsoever wrong with Yosi Fait's share trading in July 2017. Mainly because he didn't trade any shares in July. Perhaps they should have examined his share trading in June when on the 28th he netted himself one-and-a-half-million quid.

[Date of the transaction: 28 June 2017]

They can't even get the month of the offensive trade right lol.

[hpcg] 23/11/2017 13:10

Interested in renewing my short position now. In what line of business do new products have a lower margin that old ones? The reason for producing new products is that they have a higher margin, otherwise why invest?

[wiseacre] 23/11/2017 12:56

It is mind blowing the number of small purchases of this disgraced company. What are these people hoping for: the sale of the automotive division, the crown jewel, which has been on the block since August; a takeover of the company? Who would bid for this hotchpotch ahead of another trading statement and another likely breech of its banking covenants? Come on pull the other leg!

[bbmsionlypostafter] 23/11/2017 12:04

For "more resilient" read 'more stupid'.



Telit Communications PLC (TCM:LSE): Last: 166.00, down 23 (-12.17%), High: 170.00, Low: 146.00, Volume: 2.93m

11:46 am
BE So! Profit warning.

11:47 am
BE To go along with the confirmation that the 888 chap is being dropped in.

11:47 am
BE Earnings "materially below" previous

11:47 am
BE Second warning, of course. Already cut to $44-48m from $47-60m in September.

11:49 am
BE The more surprising news perhaps is that Yosi Fait takes over as CEO

11:50 am
BE You'll remember Mr Fait slotted a bunch of shares in July.

11:50 am
BE As in, half a million immediately before Telit's H1 numbers.

11:51 am
BE Which is something the FCA's looking into

11:51 am
BE But Telit, having asked its finest legals, has concluded that it's all fine. Nothing to worry about.

11:51 am
BE The reason the shares aren't lower, I'd wager, is a kind of reverse Darwinism.

11:53 am
BE Everyone who was invested in Telit but who also had a firm grip of reality will have exited a long time ago.

11:53 am
BE In the face of bad news, the folks who are left seem a more resilient bunch.

[frazboy] 23/11/2017 12:00

Some coverage of this on FT Alphaville this morning, not particular analytical but definitely amusing. I quote:

"The reason the shares aren't lower, I'd wager, is a kind of reverse Darwinism. Everyone who was invested in Telit but who also had a firm grip of reality will have exited a long time ago."

[savagedstock] 23/11/2017 11:56

This is absolutely shocking and is heading south very fast. there is no way that they would have changed the Israeli management and anyone who has ever watched an Israeli company on AIM should know the outcome - train crash in slow motion. The new Chairman is a sop to the NOMAD to keep it listed....

SO - with earnings (irrelevant) but CASHFLOW seriously below expectations, what are the banking covenants looking like??? I assume they will need more cash urgently, so maybe a highly dilutive rights issue coming up - question is who will underpin this and at what price - 30p, 50, £1....take your pick. Maybe this humongous rich HK backer will mop it up (or is that the old CEO in disguise?)

The real, problem is that the new LTE stuff is on wafer thin margins, the real value is in the old technology (depreciated and therefore at almost 100% marginal profit)...

[dangersimpson2] 23/11/2017 09:19

Agreed, he was CFO so if any of the allegations are correct he either knew about them or was incompetent.

I put little faith in rent-a-credibility non-execs - as Warren says...

“When a management with a reputation for brilliance tackles a business with a reputation for bad economics, it is the reputation of the business that remains intact.”

[owenski] 23/11/2017 08:47

I don't think Yosi is the right man. IMO the business is still attractive but needs sorting. The new chairman seems more credible to do this, not Yosi.

[dangersimpson2] 23/11/2017 08:38

Broker Consensus was for $390.1m revenue & $15.5m PAT. This means consensus for H2 would be $212m revenue & c$20m PAT.

If following today's TU they deliver say $190m revenue @37% GM vs 39% in H1 (I always thought it a little bit suspicious that they always delivered 40% GM +- 1% in the past vs 32% for Sierra) then I'm modelling c$7m PAT for H2 & c$3m for the FY.

They would normally have W/C in flow in H2 so I'm expecting them to generate FCF in H2 at least based on the adjusted figures but given the $29m negative FCF in H1 they will be FCF negative for the FY.

On top of this you will have the exceptional costs that have already been flagged and I expect at least some of these to be cash items.

I think it's clear by now that the $39m raised for acquisitions will actually be used to keep the lights on in the short term and there will be no major acquisitions unless they sell something or raise more equity. In some ways long term this is positive though because the skeletons are always hidden in the acquisitions companies make.

[frazboy] 23/11/2017 08:14

Spot on owenski

The buyer(s) appears to have returned after the opening auction (as was the case with the last trading update).

I've pencilled in the following numbers for H2

$197m Revenue
$23m EBITDA

Clearly, they are utter guess work, but i believe that this is the same technique the company uses.

[pugugly] 23/11/2017 07:29

"Early indications are that pressure on gross profit margins stemming from the transition from 2G and CDMA products (mature technologies with higher gross profit margins) toward LTE products (newer technologies with lower margins at this stage) has been greater than expected. As a result, the Board expects adjusted EBITDA for the year to be materially below previous guidance. Revenues and adjusted EBITDA for the second half will, as usual, be greater than for the first. "

SP crash today likely - imo

[muffster] 23/11/2017 07:23

All known. Great appointment though

[owenski] 23/11/2017 07:10

Pretty awful TU

Why is Richard Kilsby commenting on results if he's a non exec.

looks to me like the board has retained it's Israeli top slots and surrounded itself with window dressing, we'll see how that works out.