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Would You Buy This Business?

Phoenix Capital Research's picture





 

 

I have a business I would like to sell you.

 

Let’s run over the numbers first.

 

First and foremost, I have to be honest, this business has not implemented a budget in five years. I know that seems like an insane way to run a business, but I can assure you that management is comprised of highly intelligent, ethical people.

 

These folks would never take advantage of shareholders. They’re all highly educated. And their corporate presentations and conference calls are extremely well written. Trust me, they know what they’re doing.

 

Having said that I also need to disclose that this business hasn’t been growing much at all. Indeed, it hasn’t even maintained annual growth of 3% in the last five years. On top of this, management has been caught fudging the company’s financials by several outside auditors. An honest assessment of its topline shows zero growth for the last few years.

 

I know I mentioned before that management are highly ethical. I can assure you they have a good reason to overstate their growth numbers: if the numbers reflected reality, they’d all be fired! We can’t have that can we? So they just “massage” things a bit to make the company’s growth look better than it is and to downplay the rise in costs that are squeezing its margins.

 

Speaking of which, this company isn’t profitable. In fact, it hasn’t been profitable for five years… actually it has only been profitable a few years out of the last five decades. And those years were “profitable” based on some really massaged numbers.

 

I know this sounds strange, but those honest folks in management think the best means for this company to grow is to spend way more than the company makes in its topline revenues. Sounds weird, I know. But again, these are very intelligent and ethical people. And none of the analysts covering the company ever ask about this. So what’s the problem?

 

Oh, and I almost forgot, the company has debt. A lot of it. Currently its debt is running north of 100% of its total market cap. Of course, this is based on some unusual accounting practices. If this company actually followed GAAP accounting rule for its pension expenses its debt load if over 400% of its market cap.

 

So, would you like to buy this business? How much would you pay for it?

 

I understand, you’d like to do some more due diligence. Ok, I’ll give you its stock symbol. Do you have a pen and paper ready? Ok, the stock symbol is:

 

USA.

 

For a FREE Special Report outlining how to protect your portfolio a market collapse, swing by: http://phoenixcapitalmarketing.com/special-reports.html

 

Best Regards,

 

Phoenix Capital Research

 

 

 

 

 

 

 

 

 


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Tue, 10/29/2013 - 16:10 | Link to Comment Pancho Villa
Pancho Villa's picture

Sorry, I think I'll pass. But do you know of any bridges in Brooklyn that are for sale?

Tue, 10/29/2013 - 08:06 | Link to Comment comob
comob's picture

Yes but on the plus side this country currently enjoys a monopoly on world wide reserve currency status and has a captive and largely docile population at home which permits it to operate in this manner and has agreed to backstop all losses with their indentured servitude so - sounds like a win!

 

Tue, 10/29/2013 - 08:07 | Link to Comment comob
comob's picture

I meant to write "has a LARGE, docile population"

Tue, 10/29/2013 - 07:24 | Link to Comment daily bread
daily bread's picture

I can't understand why you think this business is for sale.  It's already been bought and Goldman Sachs et al. are quite happy with the results.

Tue, 10/29/2013 - 07:39 | Link to Comment odatruf
odatruf's picture

It doesn't seem you know the difference between market cap and revenue. And worse, you are comparing the debt of the federal government against the total revenue of all activity in the country (GDP).

Tue, 10/29/2013 - 06:54 | Link to Comment new game
new game's picture

I want in! Sounds like a winner! with no downside risk u can have a share of the "printer".

treasuries with no downside risk. newly digitized dollars with no risk sept a tad of inflation...

great post!

USA= unlimited suckbags amoungus

Tue, 10/29/2013 - 07:20 | Link to Comment SafelyGraze
SafelyGraze's picture

sovereign immunity, fitchez!

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