Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
OTT hydbrid ticker,part commons part unsecured debt.. was $15 a few months ago,then they stopped paying divi on commons due to weaker biz outlook and to conserve cash..then last week they siad they are delaying interest payment distribution on debt portion..hence the fear is that default on debt covenants of secured debt could cause a BK filing i guess, nobody really wants it without a regular divi or ditribution, a bounce play now, wont know much more until next quarterly.
It came in at .18
I called 6 cents a share last quarter a 100% beat over the so called expert.. this time Im forcasting a minimum of 12 cents a share for this quarter over the experts 8 cents..
I was wondering what the issue was with the Raymond James analysis underformIng the stock with a 5 dollar target? Can someone tell me what this is based on?
TWC netted approx. 20% or $2.4MM to EBIDTA. 20 or so staff are directly connected to that contract which will possibly be non-renewed effective 1/1/13. Will it be extended? We'll see. For TWC to simply replace the service may or may not be all that easy and they had not one complaint all that time; OTT was uber reliable. So, lay off 20 utility co. workers ( say $50K per year, benefits?... that's $1MM) we have a net loss of $1.4MM to EBIDA but no dividend as of now that retains some $9.3MM in cash. Sure, I wish I was still going to get that payment but let's say,a $0.97 interest payment supports what as a share price? At 12% that is an $8/sh price which equals the callable $7.50 bond x 1.06 premium. There are more cost cuts available by the final termination of the contract: autos, attendant insurance, fuel, assorted whatnot. The one great risk I see is the availability of refinancing but that was on the table long before the potential loss of the TWC contract and the smart money supported the $12 price as recent as 7 days ago. IMHO the question is how much of an overraction was had here.
RBC Capital Markets lowered its rating on shares of Otelco Inc. (Nasdaq:OTT : 5.31, -0.38), an incumbent wireline telephony provider, to "Underperform" from "Outperform" and price target to $5 from $17.
The company disclosed that Time Warner Cable is unlikely to renew a wholesale voice contract with Otelco. Time Warner Cable represented 11.7 percent of 2011 aggregate revenues, or $11.9 million of network access revenue. In addition, the company announced that it will not pay the $0.705/EIS unit annual dividend beginning 2Q12; the $0.975/EIS unit interest payment will be paid.
Otelco provides wholesale voice services in Maine and New Hampshire to Time Warner Cable, for which it received network access revenue for Time Warner voice traffic originating within and terminating outside the two states, as well as intrastate voice traffic between Time Warner and third party carriers. The contract non-renewal suggests that Time Warner will insource the services currently provided by Otelco (i.e. interconnection w/other voice carriers, operator services, E911/411, directory assistance) resulting in the lost revenues.
The contract expires at year-end 2012, and as such RBC lowered its 2013 revenue/adjusted EBITDA estimates to $86.8M/$37.4M from $98.8M/$42.5M previously. RBC wrote that its estimates largely reflect the Time Warner revenue loss, yet there are several uncertainties from the contract termination, including the contract's margins and the magnitude of additional revenue/cash flow pressures from a likely loss of terminating access revenue loss paid to Otelco by long distance (LD) carriers.
The brokerage believes that possible impediments include potential access-line and network access revenue erosion due to competition and technology substitution, the inability to significantly increase its high-speed Internet or long-distance penetration or to successfully integrate its recent acquisitions. In addition, we believe changing regulatory dynamics, interest-rate shifts, major shareholder selling, or changes in sentiment toward high-dividend-yield securities represent potential impediments.
On Tuesday, the stock retreated 15.92 percent to trade at $5.60. Shares have been trading between $5.55 and $19.69 over the past year.
http://www.istockanalyst.com/finance/story/5798305/rbc-capital-lowers-rating-on-otelco-ott-to-underperform-pt-5
they have a loan due late 2013, only logical reason i can guess is maybe some are concern about breaching EBIDTA covenants on that loan but cutting the divi on the common saves cash and maintaining distribution( basically divi) on debt portion of OTT security (which also has EBIDTA covenants) should indicate that mgmt and board have things under control, way overdone imo, earnings on may 4th so some clarity is forthcoming.
This one caught my eye as I've recently started bottom diving for bounces.
So they lost 11% of their revenue in the Time Warner contract but 50% of market cap? What else is driving this fall? Panicked sellers, the loss of dividends?
i am with u,fingers ,toes and eyes crossed, earnings next week may 4th
those who sa the news yesterday after close and paniced and are selling now... should see green today imo
should be a nice GREEN day imo. Oversold on the overreaction yesterday glta
32x avg vol today, usually low vol ticker, should stay elevated for a few days to 2 weeks as analysts and holders chew on events.
an EOD push would be nice, probably swinging mine for greener days ahead, unless it pops bigly,lol
ivvestors lining up at the bid to get in now... should have a good EOD and GREEN tomorrow imo
cool, some selling eod but should recovery nicely near term
You got some good ones there! I myself bought in at 6.88, this should bounce nicely!
cool, another downgrade caused second dip...http://www.theflyonthewall.com/permalinks/entry.php/OTTid1618510/OTT-Otelco-downgraded-to-Underperform-from-Outperform-at-RBC-Capital
should bounce real nice
good reload imo... bought myself some at 6.9...
agreed, reloaded 6.66 myself
double bottom forming? imo... just bought some. Seems like overreaction on the NEWS.
already bounced once from mid 6's to mid 7's, should bounce again
Followers
|
11
|
Posters
|
|
Posts (Today)
|
0
|
Posts (Total)
|
85
|
Created
|
04/23/12
|
Type
|
Free
|
Moderators |
Volume | |
Day Range: | |
Bid Price | |
Ask Price | |
Last Trade Time: |