Posts Tagged ‘telecom’

Buzz Stock of the Day – iBasis (IBAS)

Monday, July 13th, 2009

Shares of telecom services provider, iBasis, Inc. (Nasdaq: IBAS) were up more than 24 percent today, after news of a $48mln bid for 44 percent of the company’s outstanding shares from Dutch telecommunications giant, Koninklijke KPN.

The $1.55-per-share offer equated to a 19.2 percent premium over iBasis’ July 10 closing price.

iBasis operates as a wholesale carrier of international long distance telephone calls, and a provider of retail prepaid calling services and enhanced services for mobile operators worldwide.

iBasis had 71.2 million common shares outstanding, as of March 31st. In October 2007, iBasis received $55 million in cash from KPN in exchange for 40.1 million shares of its common stock.

KPN already owned about 40.1 million shares, or a 56.3 percent stake, in the Burlington, Mass.-based iBasis prior to making the bid. KPN’s latest bid indicates its intention to commence a tender offer to increase KPN’s equity ownership to up to 100 percent.

iBasis said its board will form a special committee of independent directors to consider the bid.

Buzz Stock of the Day – Alvarion (ALVR)

Tuesday, June 23rd, 2009

Shares of Alvarion Ltd. (Nasdaq: ALVR) were up nearly 10 percent today after the Israeli provider of wireless broadband technology and services announced it was chosen to deploy a nationwide mobile wireless data network in Italy.

“This contract confirms Alvarion’s Mobile WiMAX solution as the most advanced solution in the market, and our leading position as a long-term partner for WiMAX,” said Alvarion’s CEO, Tzvika Friedman.

Given Italy`s 58 million highly-dense population, WiMAX is the most economical and high-performance technology to deliver 4G broadband to businesses and residential subscribers in a wide geographic area, according to Reuters. Alvarion`s 4Motion is an advanced and field-proven solution for delivering innovative WiMAX services for a range of broadband applications in rural, suburban and urban environments.

Lawrence M. Harris, an analyst with CL King & Associates, said in a note to investors the value of the deal is more than $20 million over the next two to three years. “The Aria announcement does not change our near-term forecast for Alvarion, but adds to our confidence in the company’s outlook,” wrote the analyst, who rates Alvarion “accumulate” with a target price of $5.

On June 17, the company said it signed a deal worth more than $100 million over five years with U.S. rural broadband wireless operator Open Range Communications Inc.

Buzz Stock of the Day – Atlantic Tele-Network (ATNI)

Wednesday, June 10th, 2009

Shares of Atlantic Tele-Network, Inc. (Nasdaq: ATNI) were up as much as 47 percent at mid-day trading today, after the Salem-based telecommunications service provider announced a definitive agreement to acquire $200 million in certain wireless assets from Verizon Wireless.

Atlantic Tele-Network will acquire wireless properties, including wireless spectrum licenses and network assets, serving over 800,000 subscribers primarily in rural areas across Georgia, North Carolina, South Carolina, Illinois, Ohio, and Idaho. Verizon Wireless is required to divest these properties as part of the regulatory approvals granted for its purchase of Alltel earlier this year.

As of April 30, 2009, Atlantic Tele-Network had approximately $90 million in cash and cash equivalents, $75 million of available borrowings under its undrawn revolving credit facility, and an additional $50 million of borrowing capacity, subject to lender consent, under its term credit facility.

Atlantic Tele-Network expects the transaction to close by Q3 or Q4 of this year.

According to CEO, Michael Prior, the acquisition provides the company with “enhanced scale and revenue diversification,” and expand its U.S. wireless business. “Coupled with our existing U.S. wireless operations, we will now have significant wireless operations in rural areas of more than 10 states. Including our international operations, we expect to have more than 1,000,000 retail wireless subscribers by transaction close.”

We like ATN because the company is relsilient, generates cash from operations, and has healthy earnings growth. Shares of ATNI are down about 8.4% in the past 52-weeks, compared to Verizon’s 21.5% drop, AT&T’s 34.9% drop and Sprint’s 42.3% drop over teh past year.

ATNI generated about $65.8 million in operating cash flow and$24.1 million of levered free cash flow in the trailing 12-month period.

Buzz Stock of the Day – InfoSonics (IFON)

Friday, May 15th, 2009

Shares of our Buzz Stock of the Day – InfoSonics Corp. (Nasdaq: IFON) — were up as much as 95 percent today on heavy volume after the wireless handset provider announced strong first quarter earnings.

The company, which serves the Latin American wireless handset and accessories market, announced first quarter earnings of $247,000 or $0.02 per share, compared to a net loss of $413,000 or $0.03 per share in the same quarter of last year. Revenues for the quarter declined to $42.6 million, compared to $67.9 million in the first quarter of 2008. However, net sales increased sequentially by $9.2 million.

Operating expenses decreased were $2.9 million, a decrease of 22% when compared to operating expenses of $3.7 million in the first quarter of 2008, and a decrease of 23% when compared to operating expenses of $3.8 million in the fourth quarter of 2008.

“While we are very encouraged by the improvement in our results over last quarter, we continue to focus on increasing our revenues and gross margins,” said InfoSonics’ president and CEO, Joseph Ram. “In addition we took steps during the quarter to realign our cost structure with our current revenue level. We remain focused on profitability and are working with our vendors; both OEM and proprietary, to better manage our inventory levels and overall expenses.”

We like IFON because the company has a strong balance sheet, generates cash from operations, and is taking the right steps to maintain profitability. The sizable decrease in operating expenses coupled with the company’s ability to generate profit despite a drop in sales makes us bullish on InfoSonics’ future. Last year, the company generated approximately $17 million of operating cash flow on revenue of $213 million. InfoSonics has about $24 million of cash in the bank, and is trading at a lower multiple than many of its competitors.

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