Hey forget about that calculation. It is wrong. I will just make it simple Let’s assume the company doesn’t make any bookings or sell any airline tickets expenses (not including depreciation and amortisation)= $156.5m Cash = $157.3m - $19.3m (client funds) = $138m Maybe it would go broke but is it likely? It only has to cover expenses. An EBITDA of around $20m in six months. Already the company’s guidance for the second half of the year is EBITDA $61m (or $145m for the full year). You have to ask yourself is the company 100% wrong and they will sell no tickets and beds, is the company 50% wrong ie it will only sell half the tickets and beds and make $30m. But if the company is only 30% right it will stay afloat. In any case, lets say company couldn’t make $20m they could maybe take on more debt or do a capital raising like a most start ups do or a combination of both. A debt to equity is around 35% is not all that challenging so they would probably borrow.
WEB Price at posting:
$9.56 Sentiment: None Disclosure: Held
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