to will's point that's exactly (well not really) my perspective.
i think that dxm is a toss up right now and i am also willing to bet that dxm makes it in spirit, but not with money, and i also will be making that sort of cash with my Y warrants but i think that in the next 3-6 months we will have significantly better visibility regarding DXM's ability to make it or not.
right now i am uncertain, but in 3-6 months with 2 more quarters under their belt my whole perception could begin to solidify with them either making it or not, but that's really the earliest i could know.
Y is easy money, shooting for the easy 100%+ (it was more than that earlier this year before it went up the first 100%+)
anyway yes, DXM may well end up being worth $150-$250, but it also may end up being worth $0. Even at 51/49 probabilities, i would rather wait 3-6 months or perhaps longer till i am more confident in the outcome before i decide to place my bet, but yes, if in 2 quarters we see meaningful traction over at DXM then I am open to planting my flag there... i just dont think it's going to take the 2-3 years that will thinks it will for me to really have a handle on it, but i wont be jumping in with a core portfolio position either like i have in Y.wt
so there you have it.
also part of my thesis here is y/dxm/solocal/// say solocal and Y all have ev/ebitda of around 5.0x --- well then dxm should not have a debt problem if they can win with their digi biz.
The bank debt of Dex One Corporation (name changed to Dex Media after the merger) was the best performer
among our investment recommendations in 2012 returning over 115%. We have covered the company and the
industry through the last 8 years, two bankruptcies, and the nature of industry risk and the company’s industry
position have changed dramatically, even during the last two years. Two years ago, when the bank debt was trading
in the 40’s, it was clear to us that the company still had a dominant market share and that it will continue generating
impressive and more or less predictable cash flows at least through the next 2-3 years. It was clear that the company
would purchase the under-valued debt in the open market and that the price of securities was simply ridiculous. The
investment thesis had an outstanding safety margin for error. With prices of three silos 30 points higher, the safety
margin for error is lower, and we recommend that investors who have been involved in the name for a long time
consider lightening their exposure to the name. Bank debt silos still offer potential for 25%+ returns. However, these
returns will be achieved only under the condition of the impeccable execution of the turnaround plan the
management has in mind. This execution risk today is substantially higher than it was 2-3 years ago, in our view. If
the execution fails, recoveries can be low, and at this point, it should become clear whether the execution is feasible
or not within the next 2-3 quarters.
Well, at this point, the outcome of the story is sort of binary, and it will become more or less clear by March 2014.
Our analysis presented below shows that if sales continue to decline by double digits through the next 2 years, returns
will likely be negative. At the current price level, we recommend that investors allocate substantially lower portions
of cash to DXM securities in direct correlation with the risk taken.
now, i agree with and understand their new sales strategy, just a matter of measuring the traction over the next few quarterlies
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