Regardless of how one interprets today's news my view is...

Regardless of how one interprets today's news my view is that there are things happening in the background and the price action was telling us all we need to know.


Whether any deals get done remains to be seen, but we know that the online business is for sale and there are interested parties. There will be lots of parties that would see R2D and Grays as valuable and since they are effectively on the chopping block this might be the best opportunity for the right buyer to step up. They know that ECX is on on its knees and is a willing seller. In my view it is just a question of price and if ECX can get anything north of $50m it will be a positive given that it's MC is only $235m.

If they manage to sell the online business, the rest of the business will be a sitting duck and it will not be long before the number 2,3,4 players in the industry will want to knock them off and scale up cheaply. The MMS and ECX merger document stated a $50m EBITDA improvement by the combined group. That is a big number if a competitor can take out ECX for $300-$400m, less whatever they can manage to get for the online business.

Good luck to all.