Kaleyra rejects unsolicited offer to acquire Campaign Registry

• Kaleyra (NYSE:KLR) stock slid ~17% on Wednesday after the firm rejected an unsolicited offer from TCR Acquisition to acquire its unit Campaign Registry.
• KLR concluded that the non-binding proposal from TCR significantly undervalues Campaign Registry and its prospects for continued growth.
• Shares of KLR, which ended 12.7% higher on Tuesday after the firm announced TCR's $19.46M offer, declined ~79% YTD.

Comments

[Harrii 2021]

I was going to buy here when it was “cheap” at $3. Started loading up at 65c yesterday and more today - ridiculous !

[bazooooka]

@Harrii 2021 does seem cheap still but bottom has been elusive till now

[User 55968056]

The warrants trade anywhere from 15 cents to 25 cents. If you think The Campaign Registry is worth more than $19 million, maybe more like $50+ million, or more, then the warrants are basically a LEAP with 2.5 years to hit $11.50. Even at $11.50 this company would have a market cap of just ~$500 million, which still would be a PS ratio of just 1.5 assuming even little to no revenue growth. Potentially 1 if they can grow revenue in those 2.5 years.

Do with this information as you will.

[bazooooka]

@Invest Slowly Picks you think the registry is worth more then half its current marketcap? As for the warrants being in the money; they were once, twas a heck of a run for those of got them for some nickels and dimes. Not sure that will happen again but stock could/should make it back to 5+

[Fishing pro]

KLR is Italian company having foothold in US. Their acquisition of MGAGE definitely was scrutinized by US authorities. They were allowed to purchase that means they are not threat to US. There should be no real ground to treat KLR as not allowed to own TRC, as they are in US already. They are free to not accept bad offer and nobody will force them to sell. Stay calm.

[Amstragram]

This is more than hostile as TCR is trying to force KLR to sale, against its will and using the force of law, as explained :

TCR Acquisition considers U.S. ownership to be critical to Campaign Registry's services and the data it handles.
"Campaign Registry's operations and network constitute 'critical infrastructure' of importance to national security. While current foreign ownership of Campaign Registry has never undergone a CFIUS review, it must be independently owned by a U.S. entity," said TCR CEO Frederick Joyce.

This is not good for KLR

[Enterprising Investors]

@Amstragram It's a threatening tone. It seems unsure if they can make the need for independent ownership hard.
$KLR could also go shopping for other suitors. I'd think more U.S. owners are interested in monopoly-like fast-growing critical infrastructure.

[Adambombfx]

I said this yesterday :

The offer is hostile and expect an announcement from KLR tomorrow. Frederick Joyce made substantial buys on June 24th 2022.
Whom is Frederick Joyce you may ask ? you will all find out once KLR makes it press release.

seekingalpha.com/...

[chris sword]

@Adambombfx not much info the press release, what did I miss?

Please enlighten me

[Enterprising Investors]

Good. The offer was too low.

[Rod_G]

@Enterprising Investors exactly. He’s dreaming!

m.youtube.com/...

[AlphaAintEasy]

@Enterprising Investors What do you think it’s worth?

[Enterprising Investors]

@AlphaAintEasy Well, here are some facts: $6.5M revenue in 2021 and a double-digit (+$10M) forecast in 2022. The gross margin is 70%.

50% YoY growth with high margins should be worth more than two times sales.

It's worth what someone wants to pay, but I think a higher multiple is justified. Around 4-5 times 2022 sales would put it around $40-$50M.