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Maka-
Thanks for that writeup. My question is where did you get the size of the classes?
Did you go through all 1,900 claims or is there a summary somewhere that I missed?
Thanks.
Whoops you are right. My bid was at $.07 and I got filled at $.065.
Seems I got 1700 shares at $.07. Below what my bid was for.
If you are using the 42M shares they would have to be 42,000 which in this stock would be noticeable if we saw a few days of 42,000 shares traded in a row.
Thanks to all on this.
The 2001 article stated that revs in 2001 was $2M and expected to be $5M the next year. That would have been 150% growth which while possible I consider to be a stretch. Servicing the hospital industry would make it very hard to grow that fast.
The 2004 article states monthly operating costs of $60k/month. That extrapolates to $720k annually. I cannot see this business having margins of 80%.
I also expect that after the lawsuit in 1999 that was referenced in the 2001 article that getting in the door was easier as administrators had that lawsuit staring them in the face. Years later its hard to make connection and get in the door.
Speaking to a local Hospital Adminstrator that I somewhat friends with, she told me that this business of which Deaf-Talk is the largest is fragmented and there are a lot of competitors who show up or are at trade fairs offering this same service. This puts alot of pricing pressure. These "competitors" hurt Deaf-talk as its used against them in pricing and it hurts them when attempting to cold call. While i have never confirmed my pricing estimate she told me that they have not had a rate increase in a few years.
If the rumors of growing a sales staff are to be believed a larger presence should allow them to grow margins by spreading fixed costs along with hopefully premium pricing.
This is a fragmented industry with lots of competitors. This hospitals last bid had over 10 responses.
I could actually expect revs to be between $6 and $12M annually but I am expecting it to be in the $6-9M range.
Here is how I got to $6M in revenue.
400 hospitals x 2 machines/hospital on average = 800 units.
800 units x $450/month fee for machine x 12 months = $4,320,000 in base revenue.
Based on a linked sheet from NH Medicare back in October/November they referenced a Deaf-talk rate of $3.00/minute per service and an average usage of 60-70 minutes per month of use.
800 units x 60 minutes x $3.00 x 12 months = $1,728,000.
That would put revs right about $6M annually. This assumes nothing for interpretive services and uses what I consider to be a conservative usage for minutes.
To spotcheck if these assumptions are correct go to their website. BTW, much of the website has been updated and is cleaner and easier to use. Here is what is says under FAQ:
Thanks for the responses guys. I was hoping that it wasn't 1 year from the purchase of the shell which happened in June IIRC. I've assumed they paid whomever they bought the shell from in restricted shares and those people may want to dump on the open market as soon as possible. I'm mostly watching for downward pressure of size which would tell me that some share have become unrestricted.
The good news is I've seen nothing of that sort. If all the shares are restricted until 1 year from published fins that is better for us as they are aligned with us to get these fins published and quick.
That said, I have no idea on the profitability of the company but I bet margins get better as you grow with additional spreading of fixed costs over a larger base. That said, I don't expect a revenue number at $20M. My estimated math puts revs around $12M.
Jax or anyone else know when the restricted shares become unrestricted?
While last week I wrote a note about why I bought stock in this company and I got some private notes about being a cheerleader stopping just short of calling me a pumper, I want to address that.
My note spoke of how we have goals/wants/needs that differ from management who have manage the day to day operations. Yes, I am frustrated by a lack of communication but my DD makes me feel a little bit better. Cold-calling Hospitals to verify that they had the service and their thoughts on it helped put me at ease. However, that ease has been tempered by the lack of financial information. I own too many shares for my portfolio and that is what concerns me the most as I got greedy and didn't follow my own portfolio mgmt rules that limit an investment to be less than 10% of my value. I currently sit at 15% so its not like I am invested. I clearly am and this is my most risky investment.
My thoughts on this company will chnange is the restricted shares become unrestricted and volume increases. This would be a sign that mgmt is cashing out and would be a sign of a scam. Nothing has led me to that at this point but that is when I would reconsider my position.
In summary, I continue to hold and at the next opportunity I plan to lighten my %s from 15% to 10% but I don't plan on abandoning at this time nor am I pure blind pumper of this company.
So I just spent my lunch looking at the past three quarterly statements and I went over and read a few lines of the yahoo boards.
First I looked at their revs. Simply, they are losing $3M a quarter for the past three quarters as like stated before their revenues have dropped off a cliff. Not good but there could be some good in the balance sheet.
Looking over the balance sheet I then got a little bit excited. Assets were greater than Liabilities by $9M at the end of 2010 and over by $1.5M if you excluded the Long Term Assets as being worth $0. But there was a kicker hidden in here.
At the end of 2010 they had investments worth $7,126. These investments were Auction Rate Securities that had a nominal value of almost $25M in 2007 when they were purchased. Woohoow, as the market has came back from the bottom in Spring 2009 these ARS have became liquid again. With only 13M shares if these were worth 80% of face that is an increase from $20m or $1.00/share.
Then Shit!
An 8K was filed on April 6th that stated that due to ongoing cash needs they sold the $7,126 as of Dec 31, 2010, and $6,216 as of March 31st for $5.45M and stated that they no longer hold any investment securities. There goes the hidden value.
Even if they win the court case they still are losing money from current operations with no end in sight, liquidation will not get anything to creditors.
Well, thanks for the look. It was a good review during my lunch. I got excited for a few minutes. Anyone else please chime in if I am missing something.
They were one of my first great investments when I started to invest on my own.
While they have had many licensing agreements over the years with different companies in many countries they really have only had 3 hits. All those hits came from their agreement with TV Toyko who had the rights to Pokemon and then Yu Gi Oh and more recently Chaotic. While they have had other licensing agreements these primarily drove their revenues.
A dispute with the company that provided you all of your hit products does signal good things for me.
Their business model has changed from the early Pokemon days. In 2003/04ish (going from Memory) they had a huge uptick in costs due to the fact that Fox affiliaties which had Saturday morning broadcasting ended an agreement with 4Kids that they would show the shows for free instead switching to an agreement where 4kids had to buy the block of programing and sell the advertising that goes with it. Back then the hope was the advertising was break even but it provided the outlet for their shows to sell the stuff that led to the licensing $. This is a very asset light business model.
I haven't looked at any of the numbers but this may be a play even if equity gets cancelled. Their stock hit $40/share up from $10 during the Pokemon craze in 2000.
Agreed. Simply updating pinksheets.com or whatever is of minimal importance.
Priority Order for shareholders should be:
1. Financials
2. Financials
3. Financials
Priority Order for Mgmt should be:
1. Grow the business.
2. Grow the business
3. Release the Fins.
If they truely see the growth opportunities they feel is out there than this should be job #1a and 1b. To be honest, when you talk to them and then go out and research their penetration of the total # of hospitals in the US they have a minisclue Market share.
I am hoping to see YOY growth of 10% which while not huge is understandable and consistent. Taking it one step further, there are signs that they are growing their sales staff greatly as a % and also in a new market area (South). I hope that this is phase #1 of growth.
Simply put this business is a pretty levered business. You have Interpreters at remote locations that will provide signing services. These are pretty much a fixed cost but for every contract that you add you probably don't have to a commensurate size of interpreting staff.
While in the past this software used to be unique and probably costly I expect that the technical service is now pretty cheap of which they can outsource. This means that the business is all about leverage.
A former HS girlfriend knew ASL so when I started to invest in this company I looked her up and sent her an email (Ain't Facebook wonderful!). She still does some Interpreting on call to places such as hospitals, courts, etc. She contracts through a local company which the local hospitals use and her pay rate is about $50/hour and billing rate to the hospital is about $70/hour. This includes her travel time. She looked at the company and warned me that this system while a cost savings to the hospital does not provide the on-site personal service that her sort of service provides. She's right. But she is also protecting her job, she and my wife (Physical theraspist in a clinic) both see the value of DTI as a additional service that complements on-site ASL interpreting.
I expect that these units would be used in a Emergency room setting where the monthly costs and service is very low compared to other equipment and the cost vs potential litigation cost is very cheap. Once the patient is discharged from the ER to a hospital bed they will have the option of continuing on with DTI, an on-site interpreter who stays in their room, or a family member or someone else who can interpret. The most common is to be replaced with a family member if possible.
I try to invest in two types of companies.
1. Deep Value - usually BK type stocks or completely left for dead industries.
2. Gorilla growth companies. Stocks that can grow at 30% for a while which have network effects. DTI is such a company.
Just checked this morning and there has been nothing filed for Q1 for AIC.
Still a waiting game.
Last fall a Q3 statement on AIC (the subsidiary) statutory financials were available 45 days from the end of the quarter. That would mean around May 15 which is a Sunday. We may see something that Monday but I doubt that it will be avalable until Tuesdya or later.
History shows of their prior News releases were filed in the morning around 7:30am before the market opened. A nice honest way to digest the information.
I would expect the same here. In fact I usually login here each morning before the market opens and check to see if there is any news. If not, I wait another day.
Geez, look what you miss when you are week behind. Being sick sucks.
Welcome.
It appears that I got 300 shares at .082. Wowee, I forgot that I had this standing bid out there. Also got the 500 shares yesterday.
Any idea on how long these will be "restricted"?
Watching and trying to learn this whole process before jumping head first in the future.
Thanks.
Do you have a docket # on Pacer. I've gone through all the filings and I haven't seen it.
I'm not great on Pacer but I can muddle around at the expense of my bank account.
Have you read the writeup on VIC?
I see its there but I don't have access to it. It coincides nicely with the rise we've had from the high .20s to today.
Like EI said earlier one should read the old plan.
This is a stock where you have many moving parts, different hedge funds, different government entities looking after different things, litigation against previous executives of the company.
Again read the old plan and determine if you want to be a shareholder. As a shareholder told me on this stock, if current shareholders do not make their voices heard this story will end badly for current shareholders. If you don't feel like become an active shareholder I would suggest avoiding this stock.
IMHO.
The DIMEs are not a perfect hedge against the others. Since DIMEQ is a Litigation Tracking Warrant that had nothing to do with the bankruptcy but got tied up because of it.
Holders of Preferreds have to be torn when Steinberg represents DIMEQ. IMHO he rips Rosen apart, up and down the block which is good for DIMEQ but is bad for preferreds and common as they would get less. That said, his shellacking, imo of Rosen leads to credibility issues in the court that common shareholders could not make headway on without. All the testimony, pleas and letters from shareholders would appear to have not made any difference as Rosen could dismiss them as unsophisticated investors but Steinberg and the rest of the council on DIMEQ shareholders behalf have cast doubt on Rosen with some of their filings that were wrong, old information etc.
personally, I believe that the H's will get paid in full as I don't expect the higher interest rate to stand. I need to do the math and figure out what this could mean for preferreds. However, if I was really good at this I wouldn't be on Ihub and instead retired on Kauai.
BTW, my numbers from my previous post are from memory and may/will be off as I am typing from my phone.
The claim amount is the $34 you mentioned. There are two things at stake with regards to this stock and why it is at $14.00. First, it is the current fulcrum security in the current POR where it stands today (Class 16). Its currently being treated as debt which imo is where it rightly belongs and not as equity.
The most recent plan states that after all the holders of the class above it get 100% owed the current estimate of the money remaining would only be 57% of the current value of claim. That means holders would only get .57 * $34.00 = $19.38ish. If however there is more or less when its gets confirmed and distirbuted it could change a few %, however each month adds $30M In Bankrupty Costs (lawyer fees, etc). You will note that the % changed from in the 70's to 57% from the prior POR to this one even though there were more assets as the bankruptcy costs were greater.
That said, if the DIMEQ holders win they will move from Class 20 to Class 12. The DIMEQ litigation has a full value of around $2.50-$3.00 share and currently trades at $.90 up from $.40 last year. Using EI discount of 25% for TVM, risk, etc you would estimate that people are expecting FV to be at $1.25. That means people are giving it less than a 50% chance of success. Why is DIMEQ's outcome important to WAHUQ holders you may ask. If they are successful, WAMUQ will have to pay out over $300M to DIMEQ as Class 12 holders while they are currently listed at Class 20 and valued at $0. This would be $300M less for WAHUQ from today or a reduction of about $13/share. It would almost put them out of the money.
That is a drag on the security. However there is a contention that senior debt holders are getting paid at 100% plus 7.5% interest on what is owed in certain classes. Federal Bankruptcy generally only pays at 1.5% interest from the date of the bankruptcy. If the court determines that the interest rate should only be at 1.5% from the date of the bankruptcy filing that would be a material amount of monies that would flow down the waterfall to future classes. I have not done the math to determine how much that would be but it would be significant.
Based on that you can see there are two binary outcomes which can adjust the value of this security greatly. If DIMEQ gets paid in full and the interest rate for senior holders stay at the higher interest rate (I am assuming no additional value found to be conservative), they payout could be in the low $1-2 range. However, my back of the envelope calculation that if the interest rate is only 1.5%, holders of this security, irregardless of the DIMEQ situation will get paid in full. Therefore I have invested in this security expecting to get paid near full.
Full disclosure is that I also own DIMEQ shares and have no preferreds or commons.
I would agree but I am just an armchair guy. This had steadily became my largest position by a lot. Not enough to make me rich but hopefully good enough that I can pay down a chunk of my mortgage so that I have positive equity after the last 4 years.
I added a couple of thousand shares myself at $.86. Was pretty happy.
I think Mediation is a good thing. Hopefully a quicker settlement. They have a week to get together and select a mediator. I hope that is public as you can learn a lot based on the mediator selected.
THJMW stated that if they cannot agree on a moderator in a week, she will choose one. I think this a good sign that she wants this resolved sooner than later. That said, mediation will take months just for the mediator to get up to speed.
Anythoughts on there being more liquidity after the payments?
Congrats if you can sell it!
Yeah, I am surprised by that as well.
I would expect the stock to rise.
I'm not Chevy but I'll try to answer.
These our debt instruments not equity. As such Deutsche Bank has a fiduciary responsibility to act in the holders best interests.
There is a name on the Deutsche Bank filing who is a VP but my guess is that he just signed it. That said, in the history of this case Deutsche Bank has acted very strongly on our behalf and I see no reason to believe they would not be advocates for us in the future.
Absolutely, there are a lot of things in play that could drive money to the Preferreds but I just wanted to point that as of right now the PIERS are the fulcrum. That said, the PIERS is scheduled to be accrueing interest at the higher rate along with the debt holders. If they judge decides that using a higher interest rate is incorret and that the Federal BK rate of 1.5% is correct you should senior debt bonds trade down and the payout for WAHUQ would be less as well.
However, that would mean more money for WAHUQ and probably some for the preferreds. I have not sat and done the calculation myself at this time as i figure there will be plenty of changes coming down the pipe.
That said, I think this thing gets confirmed when Dimeq and the ruling on the interest rate get settled. The NOLs, other assets that have not been determined will not get much priority imo.
I just don't see how anything can move forward without DIMEQ resolved. JMHO. I am actually surprised that we have not heard about a settlement.
Wouldn't a payment to Dimeq, which in theory would move it from 20 to Class 12 take away money from the waterfall which would leave common and preferreds out of the money.
Right now I believe the PIERS security are the fulcrum at Class 16 and they are looking at a payout of 57%. Now there may or may not be some intrinsic value of that security post-BK but I am not as optomistic about any common recovery.
Full Disclosure: I own a full and probably too large of a position in DIMEQ and a small position in WAHUQ.
I think this is the right one.
http://www.kccllc.net/documents/0812229/0812229110308000000000012.pdf
Interesting that the article states that they have only 9 employees. Some info I was able to get through D&B stated they had 19.
In trying to learn about their business model I ended up learning about the differences between Video Remote Interpreting and Video Relay Services.
DTI is a video remote interpreting which is for interpreting using a remote user for people in the same location. This service is not subsidized by the Federal Government.
Video Relay services - is when someone wants to call someone in a remote location. Video Relay services has been under some scrutiny in the last 12-18 months as there appears to be one company that has 80% of the market and is owned by a private equity firm that has been accused of price gouging. I've been trying to buy bonds issued by this company VRS as they pay 18% but according to a broker they seem highly in demand.
Yes, Jmbell is right. There is no par value on this like WAHPQ etc.
Jax -
I may have some info on this part that you were wondering about.
Our new technology developments may well open a variety of different markets, as well."
When I called a few of the hospitals that has their service one told me about a new tech the Deaf-Talk was showing off.
In addition to the conversation being on a video screen/monitor with TV setup they now have a service through the laptop. This is probably a good long term revenue addition. Most hospitals rooms that I have been in lately have a laptop in them. Keep the monitor in the ER but allow longer term patients to use a laptop if they wish.
Or the other way is to offer a laptop version to small private practices. My wife is a Physical Therapist and they occasionally get a deaf patient. They would not sign up for Deaf-Talk based on the infrequency and the size of the unit, but this may be a new market.
I'd personally like to see a note saying they are adding a sales staff. Make it heavily commisioned and grow! I've spoken with 6 hospital administrators in my area. They all have unit from some company (none would tell me whom) but I guess an active sales rep could drive add-ons and you could hit up their clinics. In the city I live in the only units are in the three hospital ER rooms. The 9 clinics that are associated with these hospitals where most follow ups have zero units.
I have no idea if they are marketing it in either these ways but I would hope so.
The problem is the current cost of those things.
An AeroGarden is $60-$180 depending on size. A quick glance at their website these are $200-$500. If they run infomercials they will need a lower price point.
It would seem to be a good business. Move the basic units are a breakeven pricepoint and sell the other stuff, bulbs, fertilizers at recurring intervals with healthy margins.
A good razor/razorblade model which always interst me.
I assume its the hedgies who owned it before the $10 payout. He told me that looking at the shareholder list so hedgefunds did very well on the payout. My guess is that they are just holding the rest and have no reason to sell.
The Bid/Ask on this is ridiculous.
Temp-
I think we are the only people on this board. To let you know, I actually had a nice conversation with the guys doing the liquidation. Very nice and complementary fellow. Wouldn't/Couldn't say much but I appreciated that he would call me back personally from London by way of a few emails.
I would expect resolution within the year based on the fact that they appeared to be trying to sell the bonds and not wait for TAC.
I was specifically looking for information on the Trenwick Litigation Trust that was established when TAC was sepreated from Trenwick. Quite often these are funded and then the monies are returned upon completion of their litigation. The Litigation Trust sued in 2006/2007 and lost and was set to be disbanded no later than Oct 2010. I assumed this was funded by legacy shareholders and not TAC as the original documents were not clear. The rehabilitator said that he knew nothing about it and therefore it must be a TAC item. Unfortunate for Trenwick/LaSalle shareholders as I was hoping that maybe there could be a few million more but now doubtful.
Temp-
I think we are the only people on this board. To let you know, I actually had a nice conversation with the guys doing the liquidation. Very nice and complementary fellow. Wouldn't/Couldn't say much but I appreciated that he would call me back personally from London by way of a few emails.
I would expect resolution within the year based on the fact that they appeared to be trying to sell the bonds and not wait for TAC.
I was specifically looking for information on the Trenwick Litigation Trust that was established when TAC was sepreated from Trenwick. Quite often these are funded and then the monies are returned upon completion of their litigation. The Litigation Trust sued in 2006/2007 and lost and was set to be disbanded no later than Oct 2010. I assumed this was funded by legacy shareholders and not TAC as the original documents were not clear. The rehabilitator said that he knew nothing about it and therefore it must be a TAC item. Unfortunate for Trenwick/LaSalle shareholders as I was hoping that maybe there could be a few million more but now doubtful.