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TED- loan someone 60M and then NOT act like a starving lion on the payback aspect, OK.
DM has the biggest option ever; convert and control the vote on buy out or be paid 6XM and still convert some 8 centers...they have HI/LO covered and they will get their money back and a nice profit.
Would they convert everything if the B-O SP distribution was $1.18 a share? I doubt that. So the LO end of their HI play is $1.3- $1.4 IMO. Since everyone knows that, that forms the basis for a B-O, IMO. We work up from there and don't doubt, DM would love to see $4.50/sh for 56M shares. You don't think that goal represents alignment? OK, DM took cash for interest this qtr. to keep the books stable. To me, they want clear numbers to enable an active discussion that leads to a final deal.
I think the discussions with various parties were all over the place...it wasn't until the company clarified their cap structure and de facto control ( we already knew that) that the final discussions started to solidify, again, IMO.
I am not worried a bit about today's SP or volume or anything. You'll know its on when the volume jumps thru the roof.
Truth- yes! Boil it down: if nothing else, ISC will address their cap structure. An 80M loan--a 56M share buy in--a 500M buy out---all possible and NO ONE knows anything except one of the above.
What we do know: the strangling debt structure will be removed.
Folks that think the world knows that a BUY IN is 100% done are nuts. THAT would be inside info and if you think other sectors of the market are sensitive to this--well security is ultra-sensitive. If you cannot keep SEC requirements, you cannot do biz with the gov.
Further, NO buy out candidate runs up to the buy out minus 40 -150% the days just before the buy out. That is SOP so the nervous nellies as I call them, are probably shorts going long and acting like they are short but wished they hadn't gone long.
( if that sounds like a person that can use whatever bathroom they want--it's similar).
JT- plenty of seedy patents too. LOL. And more on the way.
fant- you point out a key problem: there is NO EV analysis from anyone outside the transaction, nor can there be. We all are silent bystanders as we do NOT know what exactly is in the ISC IP vault. But we do know this: plenty of next gen. non-contact IP, plenty of follow on ETD products to current products and some unique surprises.
I am assuming that ISC has set some minimum bid criteria and has spoken with at least 2 to possibly 3 interested parties. The brain-trusts from those parties has to make very educated guesses as to WHO will dominated EDS sales in "next gen." buying period and HOW they will do that.
Smith's has already told them HOW. Smith's has paved the way for bundled sales in the Middle East. If you sell against Smith's and are NOT able to bundle, you are going to lose XXXM$/cycle...this number is driving interest in ISC, IMO.
The TAMS for ETD/EDS are sketched out so everyone knows what is in play and what they need to make that play.
I've scratched out the sidelines of where "delight" begins and I also assume that mgt. is working in their own self interest also: some mgt. options happen at $1.40 but McG. and Dr. Jones have options in .70s range also.
But even hard core LONGS with wisdom and knowledge have no real idea as to share distribution potential. None. Remember, its a secret process and ISC violating that could spike the deal...and that is NOT going to happen.
MCG gave us 4 good clues: Victory Lap, NO Forward Guidance, Future Product Tease, Payment of interest to DM for Qtr ending 6/30.
I guess this could fold in and crash but I strongly doubt that. Today's SP means nothing except a buying opportunity.
JB- it would be weak of any CEO to reveal anything before all the I's are dotted etc.
In terms of McGann delighting us, well my delight green light goes on at $500M for shareholder distribution. That can be stock but that's the Rubicon Of Delight.
RE: stock price action...if the deal PR was pending, then Friday's close would indeed be depressing as it predicts a 90 cent to 1.20 cent/sh distribution.
I think the SP action is driven by extreme lack of awareness for this company and confidence in McGann...but its a nice way for employees to gain shares!
FANT-
- BAM received the interest rate bump not DM
- I don't hold them in any sort of esteem, they are what they are. Back then they hurt the stock and the company, right now-- their interests are aligned with ours.
- your description of DM saying NO to increase their position is flawed: they own control already, costs of running the company past 6/30 have to be paid and one of those costs are is interest to DM to prevent more converts given in lieu of cash, if DM says "Company X's buy out of YYY Million dollars is too low then the company must find a buyer greater than YYY+1Million.
- I DON'T THINK DM PASSES ON A FULLY VALUED OFFER FOR ISC. A PENNY POOR OFFER-- SURE, A SEVERELY COMPLICATED OFFER- NO GO, BUT WHEN THE VALUE IS ON THE TABLE DM IS TAKING IT AS ITS GOING TO BE A HUGE PROFIT FOR THEM.
I don't see them as greedy pigs in this event.
FANT- buyer X's offer, in principle and on stationary, is refused by DM...you are saying they would do that to gain more shares but the company could continue to pay interest month by month and then claw that amount back out of Buyer Y.
But once DM converts to vote on the deal, they are locked except for non-convertible debt, which again, interest on that could be paid by the company with cash much like they did thru 6/30.
Whatever the extra cost of doing business past 6/30 is clawed back in some form or way as provisions are made to operate the company from 7/1 thru final closing date...that amount of money has to be rolled into or out the deal.
What's the motivation for DM to spike a deal as they control the vote at 56% fully converted...? Again, I think it says: a good deal must be in play or there is no deal and no doubt, there is pressure on ISC mgt. to get to that deal that DM likes.
Well, interest is interest. And it raises the buy out price also.So a hardball bidder has to realize that a deadline driven bid is NOT leverage, its just a price tag fattening agent after 7/1.
But that thought suggests that this will slide on by 6/30. It could, but time is ticking and competitors are developing and buyers of next gen. ETD are hankering.
Any undervalued BID should be ignored. The company is too valuable to let a deadline create an undervalued bid. I think DM has a handle on EV for ISC.
Yes he did and he was not talking about this acquisition. DM does NOT have to give this company away. AND $200M is a gigantic giveaway. Hell, the carrying NOL is headed toward that #. Hell hell, the TSA IDIQ is headed toward that #. HELL Xs 3- the ROTW TAM is above that #. HELL SQ'D X4 the IP will spawn another 1-2B (easily) in next gen. sales. Do you think the L3 CEO read der Trump's book...?
I don't think you are learning much from reading messages on this board.
IMP- you can't be serious? Sure a buyer is using a CC to leverage a cheaper price with vague references to something he has NOT started...camon, you have to figure THAT out.
That potential buyer could be putting competitors to sleep, could be doing anything that is quite the opposite of what they said but at the end of it, a $200M EV is absurd but hey, pass that one by DMRJ and see how excited they get.
DM knows what they own and they are NOT about to give it away. They are sharks.
I expect stock to be used in some capacity...believe or leave.
OK, you are nervous. Welcome to IMSC! Everyone is nervous. Nobody knows anything for sure. BUT, read Percy's sticky at the top of the message thread. I think he carves out a good thesis for why a BUY OUT or even a BUY IN is in progress.
But once again, nothing is certain except death and taxes. BUT "taxes" has a role in this...we know the TSA is searching for answers and greatly over-extending the use of the common swab in its ETD layer. That is a huge "tax" on passenger thru-put. Couple that to Congress cutting TSA's budget in 2012 and you have the makings for Congress to do something about it if they can't lay the blame on somebody else.
What can be done? Deeper automation in passenger checkpoint, carryon and baggage. Enter ISC with NON-CONTACT ETD solutions to address/tackle that opportunity. THAT is why we are here. AND IMO, that is why some company, likely in NE is going to take out ISC. The Take Out "sidewalls" range from a competitors POV of $80M to ISC shareholders POV of $700+M.
Write down 5 possibilities, it is likely one of those 5! ( its a little know stock of a secret keeping company that has many large competitors)
Z- its hard to estimate where those shares came from and why...? Could be the Queen of Nervous Nellies...but its soooo odd to dump shares like that. Is the mystery strategic player leaving the field...?
Shi- I am all in, have been all in and am looking at being 150% all in. Percy has pointed the light on it and I have faith. Look at it this way, it would take a 5th grader to mess this up. You still guessing on the L train?
BC- well there is the THIRD way out of this stock problem but you are right, they have a mission and they are 51% there already. So how does it finish out...?
I for one would not rue a BUY IN as long as DM is paid 100% out of the stock and the company. NOTHING will succeed with DM at play. DM is smart enough to realize they are NOT managers of complex tech business with a reliance on gov. and world affairs so their taking control would only be in the event of prevention of crash or burn. But they know what they own, so there can be NO giveaway of the company. So those are the operational sidelines...ANALOGIC?
BC- totally agree, plus, McGann submerged this stock for over a year...only longs buying cheap shares and penny shorts flipping off of DM's dilution were the players. There was NO other following. And if you listen to THE analyst on the CC, he was just playing a part, IMO.
Many here have questioned why the company didn't tout it's success filled story and now, the results of that decision is in play-- IMSC is a ghost stock while ISC is a category dominator. You can't get much odder than that.
So if McGann's thinking was: let the SP drift so we can give the company away while MGT. gets a nice CIC and NEW JOBS-- well, DM has said NOPE. And if his thinking was to allow LONGS to up their positions for a juicy buy out-- then I say BRAVO!
Its all coming to a head mid-June for a later in June PR...once DM has signed off...but they can't sign off without converting...but if they do convert we will know within 3 days.
Hum- agree, 6/30 is the end,12/30 is for cushion until the transaction closes.
AS to the the buy out speculation or lack thereof, the company sent a mixed message as to what they were up to. But they also sent a message that "5-6" EDS makers were taking DEMOS. ( my read).
While a buy in would also require a declaration on the converts to look at fully diluted or potential fully diluted, I think the larger point made was where DM stands on anything with regards to a price of the company or a price of a share.
Buy in is too complicated and not in anyone's best interest EXCEPT a long view shareholder ( the in-company longs may be the best description of this shareholder).
Its pretty easy to guess who would benefit the most from ISC's IP wonder chest: L3 and ANALOGIC--but do both have the WILL and the WAY? I think both can produce a paltry amount of their shares, take this over and be immediately accretive with ISC growing revenue stream and both can easily intake the talent corp at ISC and turn them loose in their respective divisions, so the question is, which one has the strategic vision to want to grow their security divisions via new product development?
It is also safe to assume that one of these companies is who McGann was referring to in regards to keeping ISC working toward its ultimate goals. ISC would from up a R/D-PROD. facility or unit for one of these two...so which one is it?
Note, if ISC longs can't 100% say a BUY OUT is in progress, then who can? Not the market. Not the clueless shorts. Not a leak from within any of the potential companies. And not the firms hired by ISC...so where does the outside opinion come from that drives interest/speculation? It doesn't until a paper is signed, then magically, watch the SP rise to anywhere from 40% to 150% BELOW the buy out, then leap to just under the buy out on PR of buy out. That's how it is usually done and this deal is conforming to the usual sequence of events.
JT- its a D and D NEED- debt and development. Can't stand alone without a $115-130M infusion, IMO.
All things are possible...DM is fairly adept at looking ahead and doing the big math as well as providing support so they could make an offer for the 80M outstanding but I think their fatigue is similar to ours...but they won't abandon this, not now.
mtm--- yeah, I was not a big fan of ignoring the SP and the story for over a year after sacking the man that made this fly...but if McGann can deliver on a buy out, then all is forgiven. BUT "deliver" means, at least $500M.
There are 3-4 players in MASS that can make a run at this and use stock to do it. ISC is in prime position and staring dead straight at an inflection point in secure detection.
The single biggest obstacle is a congress loaded with dimwits; cut TSA's personnel budget and then ask TSA "why is there a long line"-- they do this so they can say: Opps, TSA's duty is being sold to a private company. They planned this and risked security to do so. That's how you get a 14% approval rating. Talk like a saint but act like a villain and then blame it on your poor schooling.
Its going to take a lot of R/D brain power, a significant budget but more importantly, a steadfast buyer to enable the Tunnel of Truth...magnetic, imaging, trace, maybe wave, maybe sound...but this product would be sold instantly everywhere if TSA adopted it here. This is at least a 100B$ WW TAM, IMO.
HUM- you've been in the stock how long, besides TOO long and you don't even know for sure that a take out is in progress. Nobody does. THAT is how the pros acquire...they have an acquisition company- visit one if you can, it will look like nobody works there. NOBODY knows.
I like Analogic better than L3 ( after all analg. sells their tomo units to L3). Analogic has a very low float, a diversified, top of the line product offering and they might even be a better fit...for the TOT project. Think about it, 7.5 M shares of analogic for 200M ISC...take their float to under 20M shares and they are instantly accretive and synergistic. Plus, they could be a lead contender on the TOT project...
Truth-- reading that passage...details are being sewn up and nobody wants to derail a deal, whatever that deal maybe. My sense, shareholders, including DM what a GREAT DEAL to gain their vote, but if that fails, there are other plays afoot that will lift this up and away.
As Percy has so aptly described:
INFLECTION POINT IN GLOBAL MARKET and GLOBAL SALES DRIVERS
meets
NOT TOTALLY RIPE PLUM
but picking early is OK AS LONG AS THEY
DO NOT SELL THIS COMPANY FOR LESS THAN 650M$!
Oh ye of little faith...but the SP suks...and it has suked for over a year...delight starts at $1.99.
What is your point? That they are selling the company for 80M but somehow think that will delight everyone?
Comparing DJ to Joe Montana is more like it.
IMP- when did you buy shares?
JT- delighted? I think I heard that...but its a relative term. But lets say it scoops all share purchases including the high for the year to year and half--above $1.80+15% would be delighted.
IMP- too dam lazy to do a PR? Are you serious? This isn't a lemonade stand...
TED- don't upset a deal in progress-- the only plausible reason to NOT PR the shipment to TSA.
Rest assured, the buyer knew about the shipment. Did competition for the buyer know about the shipment? Maybe. But run silent , run deep is the mode when the buyer asks for it.
Truth- the sidewalls are: 80M - 700M...does this mean 390M is on the money about the money? Nah, its so hard to tell, even as alert-smart investors because McGann has hid new product developments from us. The Hx is a wonder tool, the INLINE is a sales grabber and he referred to another product...( drug trace detection capability)...and I think there was one more product.
Now, we are inside but on the outside of the inside info. The buyer is not on the inside but has the inside on the inside info.
The SP aligns to nothing known or unknown. But it will move toward buyout SP minus 30% to 150% about a week before end of June, IMO.
TED- was the TSA shipment material? I think it was. So why was it NOT PR'd? Remember, this is still a public company with a required duty to shareholders to increase the value...how did they increase the value by NOT PR'ing a shipment ( sale) to the largest ETD client on earth?
FLIR makes a handheld that can analyze liquids ( this had a use when they were smuggling certain flammables onto planes). TSA then banned most carry on liquids.
You could say they are changing with the "times" and changing in-spite of the "times" and changing behind the "times". BUT to be fair, there is enormous pressure on TSA from every angle to always be right, to be quicker with clients and smarter than the enemy. Nobody fits that requirement. ( Israel has one airport so they don't count).
Truth- you are claiming NOBODY on this board knows the price yet you are pegging a price range...camon.
TED- the largest sale of the qtr goes UN-PR'd and you don't see that as relevant to an on-going or nearly consummated deal? Jeez Ted, if you and I were close to closing and we had agreed to a price, keeping quiet is insurance to keeping the deal on track as agreed. Why else would they NOT PR the single largest shipment(sale) of the QTR and maybe the second largest shipment (sale) in the company's history...?
JT- i believe they are referring ti FLIR's gear. Likely a FLIR plant calling the biggest joke in Congress...
Dave- ah YEAH!!!!
Problem, TSA will never jump the shark again, not after the ETD Portal debacle. They could buy new handheld ETD's if they were -/+ capable( 150 is not) and test them in 5 markets...but they screwed up royally. TSA goes to Congress and says: we lose partnership capitol due to the ON-OFF nature of Congress' budgeting, so Congress nods in agreement and then screws over security with a jerking knee and a budget cut. Incidentally, this helps their base proposition that private companies would do a better job. ( yeah sure).
TED- Plat. is a backstop and a source of intell. as well as the GREEN light. Leading the way has to be Dr. Jones from a world-wide sales perspective there is NO ONE more on top of developments in ETD. McGann is the Dr. Science and can speak with conviction about NEW PRODUCTS...not sure you can put a better team in play to develop industry wide interest and set about getting a REAL return on investment.
The other side of the table knows all of the above, respects it and is just as committed to advancing their position. This makes for a mutual admiration type of negotiation where both parties get what they want.
Again, the SP will catch up the DEAL as the deadline nears...and note this: ISC did not PR their 3rd qtr (fscl) shipment to TSA-- who the hell does that-- a take out target who agreed NOT to.
Dave- consider the situation; air travel is growing, Congress cuts TSA budgets(staff), TSA increases the time spent inspecting and the performs a larger number of inspections, add a new director who is the patsy and Hoggan is the fall guy for taking 90K in bonus'. It all makes sense in DC as the public moans, the TSA staff groans and the fingers start wagging and pointing...we also suffer thru this mess as neffenger defers to the burgermeisters of sloth but is nervous as hell as the threat has grown...so we get sniffing dogs who neither speed up nor slow down anything but add a nice touch of tension. Its a wicked stew of stupidity.
JT- Fearless Leader hid this company under a tarp for over a year. THAT never works out good.
Further, no coverage means nobody can speak to the possibilities.
The only saving grace is the IP closet that can spin off a fleet of products and uses at a time when they are in triple demand. So Fearless Leader at least has a tad of leverage and DM backing the sale and of course approving the sale.
Again the shorts are so dim that most of them don't know that DM is NOT providing cheap-everyday cover shares, that's how low the profile is. But in the end, it won't matter as long as F.L. listens to this:
DO NOT SELL THIS COMPANY FOR LESS THAN $650M.
Smith's was never in the running, IMO. They've been looking at 1StDetect, the shetland of the sector for a while. Whatever their deal is with them, ah good luck.
Smith's needed IP and TOMO--but they are lacking a full product line still...
I also heard a new-old name but the point has already been made, if you want to sell more EDS you need ETD and if you want to sell more ETD you need non-contact. Who is the leader in non-contact...
DO NOT SELL THIS COMPANY FOR LESS THAN $651M ( price still rising...and fast)
KI- very interesting weekend. Plenty of activity as we approach the start of the travel season and TSA is swabbing everything in sight and out of sight. Safe to say the expendable pull through is rising very fast. Also, the 800 more agents they are adding is NOT going to make a bit of difference as the surge in travel will overwhelm added manpower by mid-June.
NO, the dolts in Congress pushed the new TSA director in the wrong direction and now he looks like the patsy. I had hoped he was smarter than that...you can't swab the world, but you pass a hand held ETD up and down a two legs or around the inside of a carryon and then look at the screen much faster than a swab can report. The ability to anticipate is lacking...AND that is ISC's opportunity!!!!!!!!
DO NOT GIVE THIS COMPANY AWAY FOR LESS THAN $650M!!! ( price is going up)
Dave-- you have some deep perspective on ISC--what is your EV range?
Shi- one huge factor that the world has to consider: AQ/DAESH are both becoming innovative bomb-makers...they understand that AIT algo's can predict density and match to explosive material. The algo's also check shape, which the BMs are also hip to...where they are NOT hip is trace-vap that escapes and continually pollutes the air around the suspect...this is why that an EDS without an integrated ETD component is NOTHING. Who buys NOTHING...
DO NOT GIVE THIS COMPANY AWAY FOR LESS THAN $600M!!