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Ebix bankruptcy and more -8

08:58 20-Dec-23

Here's the 8-K filing from Ebix, which contains milestones for the case.  It also seemed worthwhile to note that shares will be delisted by Nasdaq on December 28th.

Here's a link the restructuring website, and the webcast of the emergency hearing, which will take place tomorrow at 4pm, for any who might be interested.  I further note that more 60% of the assets on the balance sheet as of the last report were Goodwill and intangibles.  So, although EBIX has rebounding to almost $3, I see that only as typical short covering gyrations.  Given that I've been way out ahead of this for a long time, and expect that no readers have long positions, I'm going to cease reporting on the matter, but questions are always welcome.

On 12/18/23 09:31, Esekla wrote:

Note the correction for the baseline bid of $400M below.  This is well below over $630M in debt from the last report, not to mention all the fees.  So, my prediction is unchanged.

On 12/18/23 08:54, Esekla wrote:

Ebix has filed for bankruptcy protection while it sells its North American life insurance and annuity business.  Of course, it doesn't headline that in its press release, and as usual, has filed with the SEC in timely fashion.  Instead, it highlights a stalking horse bid of $400M from Zinnia, and says that businesses outside the U.S. are NOT included in the bankruptcy filing.  The businesses being sold constitute 14.5% of revenue for the first three quarters of this year, but revenue is not what matters here.

It seems pretty clear to me that management is pursuing the scenario where it retains control over some of the business, but this is likely to wipe out American shareholders as I originally predicted.  Although I also correctly call the short term bottom for the stock price with the untimely report filing, which did result in a dramatic reduction of shorted float, I now think the stock is going to ZERO and the Ebix section of the website will be moved to the public side of the website.  The shares initially traded below $2.50 but have rebounded somewhat in the pre-market.

I have no doubt that the CEO will retain control over some parts of the business, and that the process will take several more months to play out.  However, as with Blockbuster and Kodak, I don't see how the American listing can survive the auction process or retain any value for existing shareholders.  I will look out for further details in an eventual SEC filing.

Actually, I see more potential value in AKTS shares, even though they could eventually meet the same fate.  Akoustis has announced an WiFi access point with a tier-1 customer and reiterated its forecast for 18-25% sequential growth.  While the announcement probably won't produce much of a bounce in the stock, at least in this case, the possibility of a pre-bankruptcy sale remains.

Similarly, Magnachip has begun mass production of a MOSFET for electric power steering systems for a global automaker.  MX shares are slightly off their lows to trade above $7, but real recovery would depend on profitability.

Finally, Nokia will be renting out drones in North America, after securing clearance from the FCC.  This is of some value for Akoustis, and reinforces my view that the continent is where the growth is.  That serve as final commentary for Ebix as well.

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