'kevinh' pid='53411' datel Wrote:NQ's earnings announcement today sparked my interest so I'm back. To Bill's point about a reasonable buyout price, we need to realize that NQ's shares outstanding has increased significantly, and most likely, it will dilute further. A buyout price of $10 puts NQ at close to a $1B valuation, which doesn't seem to be that low given the question marks surrounding the company. I know this kills your investment in NQ, along with the investment of many others here, but most of the longs with a higher average (like any of the large institutions besides China Rock) have probably sold a while ago. Most of the current shareholders would be very happy with $10.
A presumably high growth company, worth less than 1 Billion? @ 10 it's about 889M. Just for the sake of argument, the company enacts a buyback plan of say $100M and buys back $50M rather quickly it would put a fairly decent sized dent in the dilution if the stock does nothing or moves lower, they paid for acquisitions with stock at +$10. The company says they are better now than they were with their business and again for the sake of argument Topeka had a $33 price target with obviously less shares outstanding which to my calculation brought the value to a bit over $2Billion, unless I'm using a different starting point of shares outstanding than topeka but topeka's was pre-dilution. Therefore just say what they bought sucks, the valuation of the company then comes down to less than $1B?
Of course all the people buying at $4 would love to sell at 10, and they could have 7 wks ago, but if the company takes further action like a BIG buyback, adds someone likend CRCM to the board, and takes those shares out of the float, management buyback, the end result should be a lot better than $10, because all the while institutions may take notice. It's all about confidence and getting institutions back.. and it starts with doing the right things financially.