Euroweb Trading for Less Than Its Cash (EWEB)

Jun. 6.06 | About: Euroweb International (EWEB)

The Microcap Speculator submits: After closing the sale of its Hungarian and Romanian assets and paying its former CEO to take a hike, EuroWeb International Corp. (EWEB) is trading for about 20% less than its net cash.

According to the Company's 8-K filing, it has approximately $24.7M in cash and equivalents following the closing of the sale. It lists about $2M in closing-related liabilities and bonuses, plus it spent an additional $750k to pay off the ex-CEO. Add to that $1.2M in bank loans, leaving net cash of approximately $20.7M. At Friday's closing price of $2.83, the entire market capitalization was only $16.59M.

A savvy buyer would be able to pay off all acquisition costs, pocket a cool $4M instant profit, and still walk away with the Navigator IT franchise that EWEB paid $8.5M for less than a year ago. Not bad. I bought EWEB in size last week and expect to buy more.

EWEB 1-yr Chart

DISCLOSURE: I am long EWEB. Not a recommendation to buy or sell any security. For informational and educational purposes only.