There's a Chungus among us.
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.
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.
Also, an interesting scenario could happen if there's a price spike and O/S isn't publicly updated from the last quarterly report. I know most O/S indicators are way far behind in the 400 millions. With a decent valuation announcement for the merged company, outside investors not following ICLD might chase a market cap that's quite smaller than they realize. That would lead to a very nice spike if you time it right.
Something to think about as we get closer to merger news.
I don't know if they can negotiate just because they've hit A/S. ICLD has already shown its hand with the Reverse Split. ICLD can't do the merger without the RS and it can't survive without the merger. Debt will be able to convert once the RS happens since A/S should stay the same. That's the reason for all the reverse split & dilution problems in the past.
But the Reverse Split will affect the number of shares able to be diluted by each debt holder.
You can't short OTC
See my earlier reply for opinions.
Hou, here's some info on options for dealing with convertible debt in acquisitions: https://www.foundrygroup.com/blog/atvc/convertible-debt-conversion-in-a-sale-of-the-company/
Granted, ICLD isn't being sold so it likely doesn't apply. Still worth a read though.
Given the dilution and the recent asset sale, ICLD might be close to clearing the current derivative financial liabilities off its balance sheets. Those were around $2 million in September. About the long-term derivatives ($17 million), I'm not sure how they could clear those without either Wavetech or BV Advisory stepping in. But again, I don't know the details of the accounting, whether there's been renegotiation, or whether all of those derivatives are convertible debt (not sure what else they'd be though).
So because I find it interesting to put myself in the companies' shoes... here are some theories (ones I think are most likely I put in bold. Could be a combination, too)
1. ICLD's just milking its A/S because it can. There's been high volume this week, which means some buyers for newly issued stock. ICLD's just grabbing free cash. Wavetech might demand this especially if they'll be the ones paying that $17 million after the merger*
2. ICLD's issuing new shares for cash because the acquisition will require ICLD to pay premium prices to note holders. Thing is, it's a reverse merger so it'll technically be ICLD just renamed. I'm not sure whether debt transfers if the debtor entity stays intact.
3. Convertible debt is simply still converting. Debt holders see value here that surpasses whatever value belongs to holding the debt. Convertible notes are affected by reverse splits so I don't really see what it matters if it happens now or later. Most of the notes were negotiated around November of 2017, which means their conversions are worth nearly nothing. So not sure how likely this scenario is especially given #5 below - too much unnecessary risk when they're still entitled to the principal. Also, in order to come close to providing ICLD shareholders with 5% of the company, then debt can't convert immediately after the R/S and pre-merger. I could be wrong but it looks like there's simply too much debt to both maintain share price and not hit A/S again with $17 million diluted.
4. ICLD needs to max out the A/S to make it easier to get Wavetech their 95% ownership. I don't know what the terms of the merger are and how ownership will be transferred. This might also be Munro selling his preferred shares for a "fundamental transaction." See quote from old press release: "Absent a fundamental transaction, this preferred equity will not dilute our shareholders but will have an immediate positive impact on our balance sheet." Well, now it's diluting. If there's another way Wavetech can get 95% control of the company, then fill me in. This scenario also sets us up the best for big news and vindicating my 911 conspiracy, haha. Would ICLD have to issue a statement about Munro converting his preferred shares? idk.
5. ICLD expects debt to convert after the merger and once the share price climbs to pre 02/2018 RS levels. Again, if the long-term debts stays on the books because ICLD is technically the buyer, then the debt holders can still convert at a higher share price with Wavetech. If ICLD is confident Wavetech will have a high valuation with assets and revenue, then yeah, it makes sense that debt would convert when share prices hit $4 or so. See valuation thoughts below.* They never said in the press release that debt would convert immediately after the R/S. Also, if the long-term debt converts at $4 then $17million in conversions wouldn't skewer shareholders the same as it would now. (Yes, $4 is just a placeholder price. I know that debtors, to break even with past RS, would have to get around 100x the current SP. But with their discounts and even better SP, they still might want to wait). Converting then would add around 4.2 million shares to the OS. Not awful for Wavetech, especially since a traditional IPO would carry its own dilution, at least for the founders. All depends on valuation. $17mil into a $200mil company isn't catastrophic. But who knows how current shareholders will end up. Hopefully they at least break even
* It's possible that Wavetech can take on that kind of liability. Even if their net revenues in 2019 and 2020 are half as expected on the Angel Equity page, that's still enough to complete the merger, clear the long-term liabilities and then keep future profits. The benefits of having a US listing and ICLD's contacts/SDN research would outweigh the cost of salvaging ICLD's debt. I'm not impressed with Wavetech's lead battery BEAT products. Another poster already pointed out that there are similar products on the market. But if Wavetech can get their lithium division into the market (electric cars?) and get some big clients for their SDN energy monitoring service, then I think there's true upside. Honestly, it's not crazy to think they could be listed between $100 million and $200 million. For slaps and tickles, go into your online trading site and screen for other companies with a market cap in that range. You'll probably think, "Wow, those companies seem smaller than I'd imagined."
This ended up being much longer than I thought. Lol.
Can't tell if the typo was intentional or not, haha
If you have a fast dump, then doctors want to give you shots in the butt. Slightest hint of good news and we're flying high. People sure aren't accumulating for the dividends.
The comments that get posted on this board... haha
This morning definitely not a fast start. It'd be great if it's the strong hands and we've created a floor/trampoline for the next news spike. Would make sense for a 30% SP increase and stable, low-volume trading.
GLTA
Gotta get that checked out by a doctor!
Weird early morning T-trade
Also larger orders being filled (not T-trades). Never saw so many million+ trades before the spike last week. There's still interest here.
Probably won't hear about merger closure until February because of the time it'll take for Wavetech to complete due diligence. But they still have to announce registration of a RS. And maybe some other nugget thrown in there, too.
Hope you're right. Only time will tell now!
At this point I have no idea. I wish I did! But it seems like they would have told shareholders if debt conversions were frozen. I remember last year they changed something like $15 million of debt into convertible equity. Until an explicit update, I'm going to have to assume those possible conversions (plus other derivatives) are still on the books.
Thanks for sharing though. We'll see how it affects the broader OTC landscape going forward.
I did read it. Interesting stuff. I'd love to see how it might apply to ICLD's debt since we're still seeing dilution. But maybe it's helped renegotiate some of it? I suppose the next quarterly report could shed some light.
If news, I wonder what the strategy will be.
Release on Friday and have the extra price pressure of traders wanting to get in before the weekend (and cool down)? Or release after MLK day?
All conjecture but you got to pass the time somehow.
Also few 2 and 1 trades that made would make sense given the big hold at .0009. There was also a 3 around .001, which came before the drop to 8s.
To state the obvious, either we're walking this down like people are saying or accumulation is happening for something special. Well, accumulation is happening regardless. Nearly all of today's volume happened at .009 and volume is still higher than it was before the 8K.
There's still upside if the news happens. For some, it's a big "if." For others, it's a risk worth taking for a bigger pop (but probably not up to pennies). It's clear who here believes what :) But past history suggests a RS announcement would bring in enough chasers to make this a worthwhile buy at this point.
That's what I'm hoping too. I also wonder if the long weekend will affect any PRs and if they'll wait until Tuesday. Though ICLD has a history of releasing info on Thursdays.
Shareholder approval = Munro and his special stocks.
I'm not saying they'll max it out after the RS. But it will be tricky seeing how the new SP fights off increased debt conversion.
From the last quarterly report, diluted shares are at 6,674,442,901. That was at .003.
Not exactly. They way I read it is that the RS will happen before they hit 1bil shares. Then ICLD expects the higher price to trigger conversions. I know ICLD has a lot of convertible debt on the books so the question is how much dilution post-RS.
And given this debt, I'd expect the Wavetech valuation to be pretty high. Higher than what some people have suggested here. If their net revenues are even close to what they estimate in their road to IPO sheet (take it with a grain of salt), then they could wipe out ICLD's short-term debt and at least half of their long-term debt this year and then reap the benefits 2020 and onward. And there's whatever the hell Munro has been doing in the background to clean up debt. Otherwise, this whole merger thing is just a pipe dream and I don't see how SP could handle even more dilution after the RS and still make Nasdaq.
If I'm understanding you, I'm thinking this isn't just ICLD dumping shares on the market. These are likely convertible debt orders.
Question is how much debt is left.
The press release said that they intend to hit max A/S after the RS. So probably RS news before merger news.
"InterCloud will file to complete a reverse stock split before the merger closes, and the company’s outstanding debt is expected to convert into common shares. The companies expect that the shares of the combined company will meet the requirements to be listed on the NASDAQ exchange under the “WAVE” ticker (subject to filing and approval by NASDAQ).:
a lot of single digit trades today. 8 and 1 just came up
Sure, but the WDBG spike happened consistently over the course of a month (longer if you count all the time from the lows of October). It had time to build. New PRs could still start that upswing for ICLD.
Also, I'd guess that if there's any good news to promote, they'd want it out sooner rather than later. They'll have to file a Q4 report at some point. I can't imagine it'll be good enough to actually help the SP unless Munro really has been "working hard" in the background to miraculously clear up the balance sheet. But past evidence suggests otherwise.
ICLD: "Give me merger or give me death."
Final post on this tinfoil hat business. But look at the trades from 2:23 Eastern to 3:14. This period of time is bookended by two 911 buys with a third 911 happening right in the middle.
Buy volume = 7344359
Sell volume = 2633637
Buys were a little less than 3x sells. The price only went up .0001 from .0018 to .0019. After the third 911 buy of that period it went up to .002 but never broke it afterward.
I think this information will be more interesting in hindsight to see if it really was MM games. But if you're feeling frisky, might be a reason to jump in tomorrow morning just to see. Or just hold tight and let the rollercoaster ride and stick it to the MMs. As Andross once said, "If I go down I'm taking you with me!"
Hou, the 911 buys don't seem to correlate close enough to price drops for me to say there's any suspicion of causation. I noted a few around 2:26, 12:37 & 11:43. But it's interesting that there were also a flurry of 911 buys at the end of the day; and even though the buy-side had much more volume than sell, the price stayed down around .0018.
We'll have to see what happens tomorrow.
Yeah, mine wouldn't load past trade 631
Just an idea. But does someone have the full trade list from today? If MMs got wind of big news, then they'd bring it down and accumulate before the spike. See when it started to crash compared to the first 911.
Let's start conspiracies :)
Definitely. Always good to have a backstop or two to save profits in case ICLD falls. We'll see what next week holds!
Are those contracts for netlayer.io though? In the past, those big contracts have been for their professional services divisions (like TNS). And as I've posted before, I could see how Netlayer.io fits in with Wavetech's broader business - especially if Wavetech partners with large energy systems to regulate power usage through an SDN. Not sure if ICLD will sell Netlayer or bring it with them into the merger.
Just wondering what you think having done similar DD
Even at 6% ownership there's still upside. Let's say Wavetech is valued at $200,000,000 at IPO (That's around 16% of their anticipated valuation of 1.2bil in 2021 - so it's not a crazy number). If you own 1% of ICLD shares now - about 7mil shares - and ICLD gets 6% of the total company, that's still about $120,000 in equity. If you got in at .0005 like some of us then that's a great return. Plus, you could still see increases with more potential for Wavetech growth.
Of course, this all depends on the merger happening and the IPO valuation. Check your capacity for risk. JMO.
The .92 was before 90X dilution. Not saying it can't go higher but ICLD is not worth 680,000,000 x .92
True. Again, it's SGSI we're talking about. They're basically ICLD 2.0 since they've bought most of their subsidiaries and have a few people on their exec team who originally drove ICLD into the ground. We'll see what happens.
(a very hesitant but slightly optimistic) Go ICLD!
JMO
See my post earlier today about ICLD's "professional services" division. Wavetech wouldn't need that for their business. This seems like a positive indicator toward the merger. Otherwise, this is their biggest desperation sell to kick bankruptcy down the road for a few more months. But really, if I remember right, TNS was one of ICLD's more productive subsidiaries. Without a merger, bankruptcy is even more imminent now. #cashmoney #riskreward
JMO GLTA
I think SDN is the only part of the business that Wavetech could be interested in. The only "revenue generating" part of ICLD is its installation business, which seems irrelevant to what Wavetech does. So Munro sells that part to pay down some debt and leaves Wavetech with the SDN Netlayer.io team (and business contacts) so that they can continue developing their software defined energy grids/products. JMO