worth a look. newsletter take on them this morning
VELA closed flat...Continue to given consideration to the NBT report we forwarded....Is a fair amount of substance, especially given the strong growth projections of their acquisition of CM Mobile......Is a Greenbackers portfolio holding...
VelaTel (VELA) and CM Mobile—A 36 Month $1000 Call Option With 50X+ Upside…Really By Tobin Smith | January 16, 2014 Excerpts of interest:
With over $14 million+ USD in forecast 2014 revenues and $1.6 million pro-forma 2014 cash flow, VELA recently refinanced CM Mobile at a $10 million valuation or approximately $80 per CM Mobile subscriber (80% of which are pre-paid subscribers)…Over 125,000 prepaid and post-paid customers ..... and VELA still owns 100% of the company.
CM Mobile’s 2013 cash flow now exceeds VELA market cap…CM Mobile’s current $10 million private market value ($80 per subscriber) and its very real > $400,000 per quarter cash flow vs. VELA the publicly traded holding company $1.1 million market cap is a massive disconnect in valuation.
KEY POINT: With $10M of real value in its 100% owned subsidiary CM Mobile, and $1.2M market cap for VELA…new shareholders get an enormous discount to real private market value of VELA assets. THAT means very limited downside and enormous upside potential as the CM Mobile growth story goes main stream.
With a state-of-the-art 4G-LTE network upgrade and 5 million subscriber capacity improvement, CM Mobile will be able to vastly expand its subscriber base AND charge a premium for 4G-LTE service.
With the massive 400X expansion of CM Mobile due for completion in April, and a major customer sharing agreement signed with StarHub (details in a second), we can project from 40 to 60-to-1 UPSIDE for VELA shares over the next 18-36 months
For long suffering VELA shareholders it now appears to be the time to add enough shares to get a cost basis under .002 cents for new VELA shares…let it RIDE
In short…at such a mispriced value the downside is virtually nil…and the upside could be as amazing as our first 10X ride on VELA in late 2009.
If you have some fun money to play with, this is a much better upside than going to the blackjack table…really. Give it a look…buy some shares at this is insane value…and let it ride.....