I am not sure how using the discounted cash flow model helps your cause.
SGH has been cash flow negative since Mid 2015, and any positive valuation from a DCF analysis assumes that there is an early turnaround to a positive cash flow. A D4E deal may help with this, but SGH seems to have more fundamental problems currently.
Business performance in 1st half 2017 FY was a substantial decline from the previous half to Jun 2016 (especially in terms of revenue), so to achieve any material positive cash flow, expenses will need to be cut faster than revenue is falling.
That's a dangerous situation for any company - more so for a services type company.
No doubt the new owners of the debt have a view on how to manage the company from here, but any end result where current shareholders receive something more than nominal value for the shares seems very unlikely.
You can't change the rules of mathematics.
SGH Price at posting:
11.5¢ Sentiment: None Disclosure: Not Held
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