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"Risk comes from not knowing what you're doing" Warren Buffett Twitter: @unemon1 Scribd: http://www.scribd.com/Unemon Webpage: unemon.com Contact: unemon@unemon.com Skype: unemon1
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  • NQ: The FL Mobile Sale Is FOR REAL (Making NQ Worth > $8.75)

    Given the Questionable Past of NQ (See Muddy Waters NQ Coverage), many people might be prone to believe that the Announced Sale.

    IN THIS NOTE I WILL HOWEVER SHOW YOU THAT THIS DEAL IS FOR REAL (CITIC TRUST ALSO INVOLVED)

    1. Tsinghua Holdings Co., Ltd. (The owners of Beijing Jinxing Rongda Investment Management Co., Ltd.)

    Tsinghua Holdings, formally Tsinghua Holdings Co., Ltd., is a fully state-owned limited liability corporation, solely invested by Tsinghua University, with a very wide range of subsidiaries in the technology industry in China (wiki).

    Tsinghua (& Tsinghua University Investment Vehicles) has ha history of Announce (51) & Complete (43 so far) a myriad of Acquisitions:

    2. Beijing Jinxing Rongda Investment Management Co., Ltd. - Designated Purchaser of FL Mobile

    The Chinese Name of Beijing Jinxing Rongda Investment Management Co., Ltd. =北京清控金信融达投资有限公司

    You can get more information about this Company at the BJ SAIC website: http://qyxy.baic.gov.cn/

    What will surprised you is that CITIC Trust has put into this Company 1b RMB fresh Capital just 5 Months ago and therefore own >90% of this investment vehicle (03/30/2015). Tsinghua Holdings Co., Ltd. also contributed 111.12m RMB (03/30/2015).

    Before these 2 substantial Capital Contributions Beijing Jinxing was a dormant Investment Vehicle with only 10m RMB Registered Capital / Contributed Capital.

    Seems pretty obvious to me that the Tsinghua Holding & CITIC Trust Capital Contributions were made ahead of the finalization of a Major Acquisition. These developments might help explaining the 100% rally in NQ at the end of May / beginning of June … when rumors about possible spin-offs were circulating.

    THE FL MOBILE SALE IS LIKELY GOING TO HAPPEN:

    1. Of 51 Acquisitions announced by Tsinghua & Tsinghua University Investment Vehicles 43 have been Completed, 5 are still pending and only 1 has been terminated.
    2. Having Tsinghua Holding & CITIC Trust as Financial backers of the Investment Vehicles in negotiation to acquire FL Mobile … means that Transaction Financing will not be an issue. These 2 Fund Companies have already put 1.111b RMB fresh Capital into the Investment Vehicle (03/30/2015) negotiationg the FL Mobile Acquisition.

    3. So, how much is NQ worth? (Just to give you an Idea)

    If you assume that …

    1. NQ sells FL Mobile for 615m USD in cash (legally binding framework agreement)
    2. NQ sells it Interest in NationSky for 80m USD (legally binding agreement)
    3. Cash (266.7m USD) is real and used to repay Debt (172.5m USD+56.8m USD)
    4. Net residual Debt Free Cash of 37.4m USD
    5. Remaining NQ Business worth 0 USD.

    … then NQ should be valued at approximately 732.4m USD or 7.70 USD per Share.

    *. On the basis of 95,036,631 Diluted ADS Outstanding

    4. So, what's next?

    I still strongly believe that the Current NQ Management simple hates U.S. financial markets and is therefore planning, once the divestures are completed, to re-list in Asia, probably Hong Kong.

    Tack Fiori (928 HK) is basically an (expensive) Empty Shell in HK with no real/meaningful operations. The perfect Candidate NQ can use for a Reverse Take Over (RTO) transaction.

    Aug 27 9:30 AM | Link | 3 Comments
  • Hansen Medical Inc.: Do Not Get Fooled By The Management's Misleading PR Tactics

    --------------------------------------------------------------

    1. Read this sentence form the latest 10Q (page 9):

    "The Company received FDA clearance for marketing its Magellan Robotic System, including the catheter and accessories in June 2012, Magellan 6Fr Robotic Catheter in February 2014, and Magellan 10Fr Robotic Catheter in April 2015"

    1. Read the latest PR (Released Yesterday, the very same day a S-3 to unload 177m shares became Effective):

    Hansen Medical(NYSE:R) Announces FDA Clearance of the Magellan(NYSE:TM) 10Fr Robotic Catheter

    ….. AND YOU WILL SEE HOW MISLEADING THE COMPANY PR TACTICS ARE

    If the Magellan 10Fr Robotic Catheter received FDA clearance in April 2015 … and the company already informed investors in the 10Q … why does the company come out with a PR on the very same day its S-3 (to unload 177m shares into the market) became effective?

    --------------------------------------------------------------

    June 30, 2015 I shared my notes arguing that all investors can expect for this Company is

    1. Insiders bailing out
    2. More dilution in coming Quarters
    3. And ultimately BK down the road.

    HNSN: Expect Sell-Off, Reverse Split, New Offerings (Ad Infinitum) And Ultimately BK In 2016++.

    Yesterday (at 16:30 ET), after market Close, HNSN issued a PR announcing it had received FDA clearance for the Magellan™ 10Fr Robotic Catheter:

    Hansen Medical(R) Announces FDA Clearance of the Magellan(TM) 10Fr Robotic Catheter

    What a Coincidence, this pumping PR was issued exactly on the same day when the Latest Form S-3 (to sell 177,828,561) became Effective

    (click to enlarge)

    WHAT A COINCIDENCE, PUMPING RECYCLED NEWS ON THE SAME DAY ITS S-3 (TO UNLOAD 177M SHARES INTO THE MARKET) BECAME EFFECTIVE. GENIUS!

    Jul 02 8:25 AM | Link | 1 Comment
  • HNSN: Expect Sell-Off, Reverse Split, New Offerings (Ad Infinitum) And Ultimately BK In 2016++.

    Hansen Medical (NASDAQ:HNSN) develops, manufactures, and sells medical robotics designed for the positioning, manipulation, and control of catheters and catheter-based technologies.

    SO FAR THIS COMPANY HAS BEEN A COMPLETE FAILURE AND NOW ALL MAJOR SHAREHOLDER ARE GETTING READY TO EXIT THE DOOR?

    ULTIMATELY THIS COMPANY WILL BE A NEAR $0m (from current 170m MCAP). With About $45m in cash left by now ... Company is likely to last till Q1 2016. BTW ... do not forget the $30M++ in debt on the balance sheet.

    "The fair value of the Company's long-term debt was estimated to be $34.6 million as of March 31, 2015"

    Presence of Debt brings Equity value to 0.

    "The loan is collateralized by substantially all of the Company's assets then owned or thereafter acquired, other than its intellectual property, and all proceeds and products thereof "

    Despite having been FDA and CE approved for more than 3 years, the company is failing to sell its Devices/Products. Only about 12 Units sold each year (at around nil Gross Margins). Furthermore, by reading Employees reviews on glassdoor.com it appear evident that the Management is not incontrol of the situation and does likely not have the qualities required to successfully run a Company.

    -----------------------------------------------------------------------------------------------------

    UNSUCCESSFUL PRODUCTS + AMATEURISH MANAGEMENT TEAM

    =

    GUARANTEED FAILURE

    -----------------------------------------------------------------------------------------------------

    Price per Share near all-time lows … while Market Capitalization near all-time highs.

    Say thank you DILUTION

    NOW INSIDERS ARE EXPECTED TO UNLOAD MORE THAN 108M SHRES (per June 19, 2015 - S-3 Filing)

    Compare the 2 columns … Shares of Common Stock Beneficially Owned Prior to Offering … vs. … Shares of Common Stock Beneficially Owned Following Offering.

    Selling off babe … Selling off.

    COMPANY PRODUCTS SIMPLY HAVE MISERABELY FAILED TO GAIN ANY MARKET TRACTION … Despite having its products on the market for over 3 years now.

    "Our product revenues were $13.8 million in 2014 compared to $11.8 million in 2013, an increase of $2.0 million or 17%, compared to 2013. Product revenue in 2014 included the sale of nine Magellan robotic systems and three Sensei systems compared to seven Magellan systems and five Sensei systems in 2013".

    We can interpolate a $1.48m selling Price for each Magellan Unit and a $0.158m selling Price of each Sensei System Unit.

    Seems not much demand for the Products:

    "In the third quarter of 2009, we introduced Sensei X, our next generation Sensei system. We received CE Mark for our Lynx® catheter in July 2010. In July 2011, we received CE Mark for our Magellan Robotic System and in October 2011 received a CE Mark for the Magellan Robotic Catheter and related accessories designed for use with the Magellan Robotic System. We received FDA clearance for the marketing of our Magellan Robotic System including the catheter and accessories in June 2012 and we received FDA clearance for the marketing of our Magellan 6Fr Robotic Catheter in February 2014."

    Despite the Magellan Robotic Systems being approved since 2011 in EU and 2012 in US, the Sensei being approved since 2009 in EU and the Magellan 6Fr being approved since February 2014 in the U.S. ….

    … HNSN only sold a total of 12 Units in 2014 and 12 Units in 2013.

    2012 product revenue included the recognition of revenue on 13 robotic systems, including four Magellan and nine Sensei systems

    2013 included the recognition of revenue on a total of 12 robotic systems, including seven Magellan and five Sensei systems

    2014 (product revenue included the recognition of revenue on 12 robotic systems), including the sale of nine Magellan robotic systems and three Sensei systems

    To attract buyers the Company is basically selling the Robotic Systems at Cost (5% markup / only 5% Operating Margins)

    Service Revenue, High Margin (41%) … but limited.

    Our service revenue primarily consists of system service and customer training, which are typically entered into at the time systems are sold. These service contracts have been generally renewed at the end of the service period.

    Even assuming the Service Revenue was generated on the Products of the last 12 months (12 robotic systems) … we have an Average of $0.28m in service Revenue per year for Product Sold.

    Unbelievably SIZABLE SGA Expenses + Research Development … of about $50m per year

    I expect the Company will never be able to yield an operating Profit.

    COMPANY WOULD NEED TO GENERATE $333m in at current Margin Structure to be able to cover Operating Expenses. This represents a 2,019% Increase over Current Levels.

    Even if Products have been approved in the main markets since 2012 … sales are stagnant. I doubt something will change.

    The Company is a Cash Burning Machine, consistently burning about $40m a year.

    Operating Cash Flow

    The Company is a Cash Sucking Machine, consistently Sucking in about $40m a year.

    Financing Cash Flow ... When will people stop putting money into a lost cause?

    Operating and Financing Cash Flow Combined

    Just terrible Reviews about Management and Company's Strategic Direction (A few Cons): Glassdoor / Saved Copy

    Most start ups are lean, and try to do minimal amount of work to get product out the door, Hansen takes that to the next level. Compliance and quality are definitely iffy here.

    The company is lacking direction, projects change and get canceled/started on a whim, senior management and engineering departments generally do not agree

    - Poor senior management with a lack of transparency
    -"Good ol' boys club" mentality
    - High turnover
    - Not a great place for career development
    - Strict time-off policies with little to no flexibility for work/life balance

    still searching for the "can't live without this tool' market niche

    High turnover creates lack of knowledge within the company (all departments). Depressing stock price and with a good portion of your compensation tied to equity, you can watch your compensation decrease before it is vested and any action can be taken. It takes a long time to gain upward mobility.

    Low morale among the teams and a lot of employee turnover, resulting in a lack of corporate knowledge staying in house.

    Jun 30 9:45 AM | Link | Comment!
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