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I agree , thanks JJ. Your long post about the call was appreciated
did they give a date and time ?
Re: nasdaq
He could also do a forward split, 2, or 3 to 1. Increases daily share volume. But he would need a $4 share price to get on nasdaq (I think).
This is prob why he hesitated on MN1, about split. He said no, then said not now. The interviewer meant reverse split, but he was actually commenting on fwd split maybe in the future.
8-K
It is as if FHAL shareholders convert to CVSU shareholders when the holding company is created - prior to document finalization. Then, the holding company deals with all joint shareholders.
I think ?? This is not totally clear to me either.
I did not talk to Rufus, I saw other posts which talked about shares being bought. Not sure which post, it was a day or 2 ago.
you are totally right. I did not think of that.
Not sure about the $30 idea... I have seen no info anywhere to evaluate CVSU shares.
Posts about "Rufus Calls" are appearing every second now, on all different message boards.
If I were him, I would turn my phone off !
So long as he buys 50 percent of the float for pennies, he could pay $15 for the other half and still break even, assuming the stock price stays above $15, and he feeds his cheap shares into the market slowly, over a long time.
I agree with your post 100 percent. I was just about to post the same thought.
Basically we have a share buy back now. Rufus has said he is buying shares now, and we can see from today's action, the float is drying up.
Could there be a typo in section 2.6 of the 8-K Rufus is not aware of ?
Actually, I would like to know more about how profitable their existing venture's are.
MN! Interview, another view. Just a theory here, nothing real to support this, but:
I think there is a possibility rufus's late arrival, and short limited answer style may have been an action to keep investors nervous, the price down, and allow slow insider accumulation.
Knowing when the merger, and PR's come out, the stock will take care of itself.
As a post several days ago said: they may be smarter than we give them credit for.
Possible ???
From new (in process) CVSU web site:
CVSU intends to list its stock on the NASD. To this end, CVSU is in discussion with various market makers to engage in a firm underwriting using a syndicated market distribution approach. Moreover, CVSU intends to set up a captive insurance operation through its’ insurance liaison with Lloyds affiliations, who are members of the CVSU team.
CVSU intends to write policies to cover its loans, when applicable and secure the proper re-insurance for underwritten loans through the London reinsurance markets and other applicable markets. CVSU has made arrangements to secure primary insurance against loan loss through the London insurance market and others and has several reinsures available for the underwriting of such insurance through its captive. CVSU is setting up to operate an ABS management company in manage its portfolio.
CVSU intends to operate its business and apply for a company rating from Fitch rating service. As CVSU’s public target will have been a corporate entity for more than five (5) years with more than 3 years of operating history, it will qualify for submission to Fitch Rating Service for a company rating. Such a rating will be beneficial in Europe and the U.S.A.
no question, that is their most valuble project in the existing portfolio
Future deals.
I have struggled with 2 distinct views.
1. I have more confidence now that CVSU mgmt believes stock will be worth a minimum of $15 after closing this deal, and they do intend to go to Nasdaq. Mgmt has very strong bond financing knowledge and international connections to get it.
2. I do not believe existing CVSU portfolio (weak), Balance sheet Assets (not bad), and Amazon deal (Good, but long term time frame to complete) would allow this stock to sustain $15 price after merger. This would equal 1.5 billion market cap. Although I do think the share price will be worth dollars, not pennies.
So my current conclusion is that mgmt has other deals to announce during the trading halt. Their web site has press releases describing possible 3 billion dollar European bond funding, and a list of possible future projects. These future projects are dramatically more significant than their existing portfolio.
I did increase my position size today.
Several questions.
1. I saw this link on google last night, but if we also look at the GA Aerospace info in post 1587, it shows employees at 20, Revenues at 5 million. Since this press release is from 2002, I could not determine if this hiring announcement ever occurred. If the numbers post 1587 found are accurate, they do not support the employee hirings mentioned in PR from 2002, or they have significantly downsized since then.
2. The price to book estimates you mentioned on a previous email used a final book value of 300 million, which equates to this asset on their balance sheet: UCC Security notes, $310 million. What do we know about the real value of these ?
There is real value here, but I agree with a past post from RonnieD that these numbers do not support a $15 price. I do believe there is real value here,in the 2-4 dollar range.
When the stock re-opens after a trading halt, it will not matter how us penny traders will value this - we will be 90% sellers. The question is what will buyers pay. And the buyers will be institutional and mainstream small cap investors. How will they see this stock.
Thanks for the post. I do wish you luck. I have a small allotment of shares, at this time.
I will spend some time looking into the 2 areas of concern mentioned in your post. Honestly, other than GA Aerospace, I found little to excite me in their portfolio, although they do seem to have very good access to capital.
Their web site has a lot of press releases and detail about financing, and derivative products and filings, but little about subsidiary performance.
I do like the Amazon log project, although I think it will take many years to complete the projected revenue, perhaps several decades ?? What do you think ?
Many of the listed companies seem insignificant to me.
I have been looking at some of the companies in the CSVU portfolio, listed on their web site, and I do not seem to find much detail about revenues or performance. Can others please post info they have found.
I did see the American International Smart Structure info - what do others think of this division ?
When was the last time you saw the LOI there ?
I reviewed the COETA site yesterday, and was surprised there was not info under log recovery.
Amazon Timeframe.
I have been wondering how long it will take to generate the 1.5 Billion in log rev, since annual revenues are key to any pps determination. This type of info has been lacking in this deal. On Google, I found info that the entire Amazon basin area may have 4 billion board feet of sunken logs. FHAL releases state phase 1 (the "easier" part) will be 2.6 billion board feet.
So, on the web, I found formulas to calculate the board feet in a log, based on dimensions. I had to do some estimating, but I think a typical large amazon log should be under 200 board feet. (input welcome on this estimate). This means 2.6 billion board feet = 13 million logs. The MN1.com release on FHAL says 1 crew can do a minimum of 200 logs per day, but due to Amazon river conditions, you can only work/run barges 10 days per month. I did not understand this, so I actually am using 20 days per month in my calculations, to estimate a best case scenario. (there are stories that in some parts of the Amazon, balloons are used to lift logs out, although, this is probably in phase 2 ). If 10 days is correct, all revenues per crew would be cut in half.
To finish here, 13 million logs, divided by 4000 logs per month, = 3250 months (270 years) to generate the revenue, for 1 crew. So, obviously, many crews will be needed. It will not be a cheap undertaking. The MNI.com release discussed using several crews, but they will need a minimum of 25 crews to do this in 10 years. (no idea how many crews are planned - would love to know more specifics, since this directly affects share pps valuation). This would = 150 million in annual rev, if a crew can work 20 days per month, plus the green carbon credit income - although, since I suspect the vast majority of net profit will come from green credits, full weighting should not be given to Log rev in a pps calculation.
It seems the credits are where it's at. They were designed to encourage projects which help environmentally, and with greenhouse gas (Kyoto treaty). They are typically used on projects which are not normally financially feasable. So i think the big log undertaking may be marginally profitable, but earning credits, which could even be held for long term appreciation, is the main $$ in this. (polluting countries/operations in Kyoto signed countries buy these credits when they fail to improve upon 2000 pollution satndards.)
If anyone has info on how many credits this type of project can earn, please update me.
This is just a guess here, but due to the complete lack of specifics from FHAL, when they first announced the letter of intent, it's a start.
Your analysis makes a lot of sense to me, I do not see it happening either.
do you think CVSU is paying $15 per share for FHAL ?
Re: Rufus conversation
First, per 8-K, COMPANY in 2.6 = CVSU
FRONTHAUL GROUP INC., a Delaware corporation (the "Buyer" ); and Conversion Solutions, Inc., a Delaware corporation and a holding company (the "Company" ).
2.6, sub section b says: pay $15 TO COMPANY SHAREHOLDERS.
Secondly, this would value Fronthaul at 1 Billion dollars. This is not a fortune 500 company.
Third, CVSU balance sheet shows minimal cash, relative to other line items
good post ajman.
I will read again, and think through option A
Not negative, just hesitant.
I understand the logic of all your posts, and I am not at all certain there is a problem here. I am just uncertain of how I can make sense of section 2.6. So, I will wait to re-enter the stock, until things are clearer.
I understand. Just need to see if section 2.6 is enforced. That's why I had hoped for more info in today's interview, or from a follow up PR. Hopefully soon.
I hope so too. I really want to like this deal... I just hoped for more insight from the MN1 call today.
Another alternative to a FHAL split would be to issue many new shares to CVSU current shareholders. Then the no split quote would be accurate, although, he did say "no split...not now"
The $15 price is interesting since it equals the current aprox value per share of CVSU. They may have hoped the news of merger would drive FHAL price close to that prior to closing,. That would be a win win.
Split ?
If FHAL did a reverse, to the 620,000 shares you mentioned, and CVSU gets 1 new FHAL share for each of their shares (50 million, or so ?? - I do not have time to look up the exact number), the new entity would be 95% CVSU. And FHAL shareholders would take a huge hit.
Or, CVSU could just not choose to enforce the clause.
I agree the Amazon deal is great, but is it realistic CVSU would give away 50% of a company with 800 million in assetts for the letter of intent, especially where the quoted 1.5 billion potential revenue will be spread over many years, incur many expenses, and also be shared with the CEOTA contract holder ?
Just not sure...
20 days
"Actual Average Closing Price" means, with respect to the Buyer's Stock, the average of the daily closing sales price thereof on the Over the Counter NASDAQ Bulletin Board National Market System during the twenty (20) trading day period ending three (3) Business Days prior to the Closing Date, as reported in The Wall Street Journal.
8-K, Reverse split ?
I was a holder of FHAL (30K shares) until mid day today. While not thrilled with the lack of enthusiasm and detail on the MN1 call, I stayed in. But the following issue was brought up in posts mid afternoon, and I sold, at a small profit, until I get more clarification, or until the merger is signed.
I would really like others to comment on this, so I can re-enter earlier. I have abbreviated the legal language to make it easier to follow (see section 2.6 of 8-K for all exact language, or message 903.)
Obviously FHAL will be under $15 just prior to closing, and FHAL can not afford to pay CVSU $15/share, so the only choices are: CVSU waives this clause, CVSU pulls out, or FHAL does a reverse split. I know Rufus said no splits on MN1, but then he added: "not now".
2.6 AVERAGE CLOSING PRICE ADJUSTMENT.
In the event that the Actual Average Closing Price is less than $15.00, ((FHAL) shall deliver written notice to the Company (CVSU) no later than the second (2nd) Business Day preceding the Closing Date
pursuant to which the (FHAL) shall elect, in its sole discretion, to:
(a) maintain the Average Closing Price at a price equal to the Actual Average Closing Price ($15);
(b) set the Average Closing Price at $15.00 and pay the holders of (CVSU) Shares receiving shares of (FHAL’S) Stock as Merger Consideration an amount in cash equal to $15.00 minus the Actual Average Closing Price per share of Buyer's Stock to be received by such holders of (CVSU) Shares
or
(c) set the Average Closing Price at $15.00 and pay no additional consideration to the holders of Company (CVSU)Shares receiving shares of Buyer's (FHAL) Stock as Merger In the event that the Buyer elects option (c) described above, the Company (CVSU) may terminate this Agreement by providing the Buyer (FHAL) written notice of termination no later than one (1) Business Day prior to the Closing Date.
I agree, Something is wrong with this picture.
After reading post #868, I reviewed that section, and agree there may be an issue. Basically, the way I read it, and the sections preceeding 2.6, FHAL is guaranteeing a 20 day average stock price of $15. This price is checked 2 days before closing.
If it is less, 3 choices:
1. FHAL comes up with cash ($15 - avg price)for CVSU shareholders
2. FHAL does a reverse split to get the price up to $15
3, FHAL does nothing, and CVSU can pull out of the deal