Liberated Syndication Inc. (fka LSYN)

[eastwindwards]

On valuation, take a look at my post from 8/9 here: http://investorshub.advfn.com/boards/read_msg.aspx?message_id=124413657

Current assets: .20
Cash: .17
Current assets net of current liabilities: .16
Cash net of current liabilities: .13

I'd only rely on the last number and would give it a big discount for risk of management putting paws in the cookie jar. Call it .06-.07.

Until these guys prove they are not stealing investor resources and demonstrate that they are generating sustained growth, hard to see this stock being worth much more than the hard assets. I said .20 to be generous with a 3x multiple on hard assets as to the max price where I'd even start to consider buying.

I'm not saying the value of Libsyn as a company is 20 cents. It's clearly worth more. The problem is that you can't just rely on the value of operations. You have to account for governance and ask yourself how much of the value will flow back to investors versus the CEO/CFO/Board taking it for themselves. It's naive to do a spreadsheet exercise to come up with a valuation of the company and then fail to account for the important question of how much of that value investors can get.

The CEO/CFO have a terrible track record where they took Libsyn's previous parent company (FABU), bundled it with a Chinese shell company that had made-up numbers, and pumped the stock price up before they personally profited by dumping shares immediately before the scam was exposed. I still have not been able to get a good answer as to why Christopher Spencer (CEO), John Busshaus (CFO), their accountant, and possibly the entire Board are not in jail for their shenanigans. The best-case story is that they were stupid.

Now they are paying themselves $1.5 million annually on $3 million operating profit all while they own less than 2% of the entire company. Even if the stock price goes to $5, how much upside do they have in light of their limited holdings versus the value they are extracting in the form of unjustified cash compensation? Where do you think their incentives are? Their own behavior says a lot. If they had an ounce of decency or respect for their duties to shareholders they would give those salaries back to the company or would never have taken them in the first place.