Author Topic: CALL - MagicJack VocalTec Ltd  (Read 14594 times)

LightWhale

  • Jr. Member
  • **
  • Posts: 84
Re: CALL - MagicJack VocalTec Ltd
« Reply #40 on: October 11, 2018, 08:26:01 AM »
Price is getting even cheaper, 7.72. Assuming the acquisition goes through, that's a 13% spread.


walkie518

  • Full Member
  • ***
  • Posts: 238
Re: CALL - MagicJack VocalTec Ltd
« Reply #41 on: October 11, 2018, 11:31:27 AM »
Price is getting even cheaper, 7.72. Assuming the acquisition goes through, that's a 13% spread.
Should CALL's profits or revenues decline substantively, does B Riley have the right to walk and if so is there a penalty?

LightWhale

  • Jr. Member
  • **
  • Posts: 84
Re: CALL - MagicJack VocalTec Ltd
« Reply #42 on: October 15, 2018, 07:30:21 AM »
My understanding of the proxy is that A) there's no termination fee on the side of the buyer, only of the seller  And B) if FCC approval is not given by the 9/11, both parties may abandon the merger agreement without being held liable.
Will appreciate other opinions.

Either way, I'm not aware of any apparent reason for B.Riley to walk away from the merger. They consummated similar deals in the past for the sake of cash flows, and going through their earning calls, I could read nothing between the lines about changing their minds on this one. The financials of MagicJack haven't deteriorated significantly, plus B.Riley's managers will be hard-pressed to blemish their reputation by admitting a mistake and incurring sunk costs. 

Then again, by the price action I'm obviously missing out on something. What do you see as the reason for the stock price going down?
« Last Edit: October 15, 2018, 07:35:57 AM by LightWhale »

walkie518

  • Full Member
  • ***
  • Posts: 238
Re: CALL - MagicJack VocalTec Ltd
« Reply #43 on: October 15, 2018, 02:04:51 PM »
My understanding of the proxy is that A) there's no termination fee on the side of the buyer, only of the seller  And B) if FCC approval is not given by the 9/11, both parties may abandon the merger agreement without being held liable.
Will appreciate other opinions.

Either way, I'm not aware of any apparent reason for B.Riley to walk away from the merger. They consummated similar deals in the past for the sake of cash flows, and going through their earning calls, I could read nothing between the lines about changing their minds on this one. The financials of MagicJack haven't deteriorated significantly, plus B.Riley's managers will be hard-pressed to blemish their reputation by admitting a mistake and incurring sunk costs. 

Then again, by the price action I'm obviously missing out on something. What do you see as the reason for the stock price going down?

I agree with all of your points.

That said, a buyer has access to financial information that is better than what GAAP provides so I speculate that the market believes that the deal does not go through not due to antitrust, but that there has been a material decline in something that doesn't show up in the GAAP statements on a forward basis?  Maybe it's just timing?

At the same time, this might be an interesting risk arb play should B.Riley still be interested in closing...