Multiband Corp. (MBND)

[Knowledge is King]

Good post rrat02; some other CC tidbits...


--MBND continues to suffer from an obscene tax rate, 57% in Q3 and 59% for the nine months. I'm still not really clear why and am hoping Q4 sees a downward adjustment for the year (and a corresponding boost to EPS).

--Management seems quite optimistic about the company's new effort to penetrate commercial establishments such as bars/restaurants/dental offices/etc. In the Minneapolis trial market for this effort they have established a dedicated call center making outbound solicitation calls. Management says that there are thousands of potential customers in Minnesota alone. Pending success in MN, the company will do a slow rollout of these efforts nationwide.

--Q3 cash provided by operations, while impressive @ $3.8M, was down from $6.2M in Q2. Management attributes this decline primarily to training expenses for the company's "Technical Installation Force".

--MBND continues to talk up the opportunity to penetrate the MDU (Multiple Dwelling Unit) market (ie. apartment buildings, condos). They say that the US market is about 32M MDUs, and MBND's goal is to eventually capture 1M of these. MDUs are more profitable than MBND's traditional home segment because the company bundles and sells video/voice/data services to MDUs. They estimate that MDU clients offer up to a 30% internal rate of return on investment; such impressive profitability has opened up several funding opportunities to MBND (under evaluation).

--Finally, management tossed off a comment on what they called a "hidden asset". MBND currently has approx. 20,000 data/video/voice subscribers and, according to management, recent private-market purchases of such "subs" have been transacted at $2000-4000/sub. The low end of that range equates to $40M for MBND!

Overall, I think management is taking the right steps to grow the company and continue to view the stock as an undiscovered diamond in the rough. I expect to be a stockholder for at least another year or two...