Talk today in the paper of a busted-up, broken business model that was based on debt & acquisitions. Price $0.75c and falling. How times have changed.
This is the issue.
They have a market cap of about $80Mill. They have to pay about $65mill cash to the owners of the businesses they bought next year. Problem is those guys could take the cash and run and start new agencies with the cash. Which leaves Photon with a brain-drain and a bunch of company's that are not worth half the price they paid for them. If that.
Add to that, advertising budgets are going to get slashed, which means less money coming into their companies.
The thing is, they have some good businesses, especially in the internet sector and search marketing which I know for a fact that are going gangbusters.
They're gonna get hit with the ad market as it is, they'll cut dividends to pay down debt, and they are gonna lose good people and they will make writedowns but at these prices geez, even factoring everything - if they can survive - its bloody cheap.
Thoughts anyone?
todays afr bit, page-2
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