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  • Alteva: Verizon 'Put' Means Investors Can Buy A Growth Company Almost For Free [View article]
    What is interesting about this interaction is that we are doing similar calculations and then coming to different conclusions. I largely agree with everything you just said—keeping in mind that there are a range of possibilities for the amount of cash that can come from the OP. But yes, broadly, I agree. So my thought was why wouldn’t you pay 2X sales for a business that can grow rev at 25% while bringing down cost? Again, it seems cheap to me. But I admit that probably has to do with my idiosyncratic view of the industry and some personal negative views of comp companies. Anyway, I’m new to SA but if you look at most of my articles, I tend to be one that points out some specific fact that I don’t think is getting a lot of attention. I’m not one to lay out an in-depth, comprehensive analysis because I think they’re meaningless if you don’t do the work yourself. When I see people talking about “volume” in my comments, I get a little worried—because I never meant for this to be a trading idea. So again, thank you for reading and I hope you continue to follow the company.
    Aug 29, 2013. 11:19 AM | 1 Like Like |Link to Comment
  • Alteva: Verizon 'Put' Means Investors Can Buy A Growth Company Almost For Free [View article]
    Thanks for your work on this. I recall getting a similar calculation. Again, as someone with many contacts in the UC space, my bet is on their ability to ramp up UC faster than projections. In terms of the downside protection--I think it is is just a difference of time frames. Since I run my own money, I'm not particularly worried about what cash is in Q1 2014--so long as they'll have access to cash. My question is: is the UC business, the OP partnership and the telephone business cheap based on a 5-10 year outlook?
    Aug 28, 2013. 08:34 AM | Likes Like |Link to Comment
  • Alteva: Verizon 'Put' Means Investors Can Buy A Growth Company Almost For Free [View article]
    Thank you for your feedback. I don’t know that I have any new information for you, but a few things to keep in mind as you do your analysis:

    --I do explicitly mention that the $50 million is pretax. Management doesn’t know exactly what the taxes will be.

    -- The dividend was cut so that cash could go to improving the balance sheet. I didn’t buy Alteva before the dividend cut because I was worried about the balance sheet. Management showed a focus on long-term per share value by cutting the dividend. Remember, they’ll be getting a $6.5 million cash distribution from the O-P Partnership this year.

    --Part of my bet is based on the fact that I think we are moving from investing years to earning years. CAPEX will decrease. Operationally, I think they are doing a better job getting their name out in UC. (This is a subjective observation based on my contacts in UC). I believe the cash spent in the last couple years on infrastructure is going to allow for greater leverage and with their potential for continued high revenue growth, I think there is a good bet we are going to see appreciably higher cash flow.

    I don’t think Alteva is a “sure thing”, but I think it is very hard to lose money at these levels over the long-term. If they get into a short term issue, they have access to bank debt. If I can get all the equity in the depressed telephone business, the growing UC business and the O-P Partnership for ~$48 million, I think that is a steal long-term.
    Aug 20, 2013. 08:51 AM | 1 Like Like |Link to Comment