Quote:
Originally Posted by boswd
but free cash flow is arrived after Net Income (which is important to note)... someone reads zero cash flow, the first thing that comes to mind is they have zero cash coming in.
|
I doubt qualifying it as "free cash flow" makes much of a difference.
Especially since net income happens to be tanking.
Net income has been dropping for the last few years: From $150m in 2007 down to $36m in the 52 weeks ending June 2010. Net income was negative 3 out of the last 5 quarters, including a loss of $35m or so in the most recent quarter.
I.e. if this keeps up, they can't pay the dividend from liquid holdings, and given their debts and prospects it's not a good plan to borrow just to pay the dividend.
Again if taken in isolation, not the kiss of death. However they have a strong competitor with significantly lower overhead and diverse revenue sources that's claiming 70% or more of the ebook market, is selling out of ebook reading devices, and counters B&N's every move; a new competitor with a huge brand presence; declining brick & mortar sales; stock price tanking; management fighting a major investor; substantial debts; no one is publicly expressing interest in buying them, other than people who are already heavily invested. The bad news is piling up.
Did I leave anything out?