WHY DOES THE NetComm BOARD WANT YOU TO SELL YOUR SHARES FOR HALF THEIR FAIR VALUE?, page-8

(Gwaihir comment)

Over one year, the CASA Share Price is down from USD$21 to USD$6, and it's still sinking.

There are many reasons for this, including those described in the article below by Timothy Green.

And including the fact that CASA (China) are probably being impacted by the USA/China trade war, which will get worse, Trump will not back down.

And including the fact that CASA owners are taking between USD$3 and USD$7 million a year in salary EACH, and more if you include benefits. It looks the company is being stripped by the owners now, before it goes down the drain.

As a result, I'm expecting CASA's share price to fall back well below USD$1 during the trade war period.

This is a technology cold war, and if Trump is re-elected, it will worsen and lengthen with time IMHO.

Here is what I think CASA are trying to do, to save themselves.

I believe they orchestrated the NTC share price decline in order to takeover the company, for a good reason.

I believe they are using the same business practices as Huawei.

CASA will probably keep the Netcomm brand, and begin selling more products under that brand. Many of those hardware products are produced in China. It's a surreptitious  way of getting around certain regulatory problems, and of not having their clients seem to be associated with a failing business.

I believe CASA may be on the list of USA companies being currently drawn up for investigation by the USA government, of companies importing 5G hardware technology from China.

CASA may get around this investigation, if they can say they are now importing their 5G Hardware from Australia (even though most of it may be produced in China and then shipped to Australia first). This is one reason I think this takeover of NTC is happening. This is how some businesses work, similar to Huawei.

CASA Systems First Quarter Profit DOWN 60% Year on Year.

Seeking Alpha also published a recent article on CASA Systems, titled "CASA Systems, Fog of War or Dumpster Fire", which also makes interesting reading, and re-iterates the points the above.

Here is a small quote...
"(CASA) has been plagued by a lack of visibility, executive turnover, and disappointing results. "What the heck happened to the stock?" The stock did, after all, decline by around 58% over the past year compared to +2% for the Russell 2000. If you are asking this question, don't worry, you are not alone."

Gw


Why CASA Systems shares tumbled 15% (May 2, 2019).
(by Timothy Green, on The Motley Fool)

Over one year, the CASA Share Price is down from USD$21 to USD$6
Revenue and earnings fell off a cliff.
Timothy Green
May 2, 2019 at 11:51AM
What happened

Shares of Casa Systems slumped on Thursday after the provider of broadband infrastructure technology solutions reported its first-quarter results. The company badly missed analyst estimates for both revenue and earnings, sending the stock down about 15% by 11:15 a.m. EDT.
So what

"The first quarter was one of our toughest quarters," remarked Casa CEO Jerry Guo. First-quarter revenue was $35.5 million, down 60% year over year and more than $20 million below the average analyst estimate. An industrywide slowdown in hardware spending, large customers redirecting capital expenditures elsewhere, and a slower transition to wireless and fixed telco revenue than expected drove revenue lower.

Non-GAAP earnings per share came in at a loss of $0.14, down from a profit of $0.23 in the prior-year period and $0.16 lower than analysts were expecting. Adjusted EBITDA was a loss of $7.7 million, down from a profit of $29.5 million in the prior-year period.
Now what
Casa is expecting a stronger second half, with CFO Maurizio Nicolelli pointing to a strong pipeline of opportunities. For the full year, the company expects revenue between $250 million and $300 million, and non-GAAP EPS between $0.30 and $0.40.

With miserable first-quarter results, it's not surprising to see the stock selling off.

(END)

Gw