Savvy Trades and Investments

[wadirum1]

1. I definitely believe the buyout is legit in the sense that it will happen and the terms of the buyout will be as stated.

2. The real question is whether it is also "legit" in the sense that the shares of CPT are worth what CPT says they are worth.

The terms of the deal involves 45c in cash. So, right now, you are paying about 70c to get some shares of CPT. CPT got some venture cap investment in 2018 on terms such that the CPT shares part of the buyout would be worth $2.22-$0.45=$1.77. So, the real discount that I am focused on is that we are paying 70c now to get $1.77 worth of CPT shares in next few months -- if the CPT shares are really worth that.

Your question asks why on earth CPT would pay that much. Well, INUV has traded that high within the past 2 years. Recently, fears of delisting from AMEX has caused a lot of selling (I think). Also, INUV has very substantial revenues -- sufficient to justify the price. But, I'll grant you that they just can't seem to turn them into profits.

I've looked at CPT's 2016 and 2017 numbers: https://ir.conversionpoint.com/. Their top line grew from $8M in 2016 to $50M in 2017. And they have been winning awards left and right and acquiring companies with venture cap funding. Lots of goodwill on their balance sheet (and INUV will add to that). But it all seems pretty reasonable as a very aggressive growth scenarios. I'm not saying that I would want to buy a ton of CPT shares at $1.77. But that's what some venture cap guys did earlier this year. And they indicated they have investment banks lining up to do the IPO. So, I don't think the 70c versus $1.77 discount is appropriate.

But what the heck do I know? Eh? Your thoughts?

Wadi