re: big $$$ to be made now by those with patience The closing of the Telecoms unit was flagged at the AGM and is indeed good news in the medium-long term. But in the short term there will be closure costs (staff redundancies etc).
Going simply on the balance sheet ETC needs to re-capitalise at some point. It had negative NTA at the last annual result (though positive working capital). ETC needs the ongoing support of Rentworks to rollout Intrigue - a company with negative NTA does not have a good credit profile - perhaps there are provisions in ETC's agreement with Rentworks requiring it to have a certain level of solvency? It should be remembered that ETC is not an investment grade company but speculative - there is no guaruntee it won't go under (though I don't think it will).
By the by, if ETC does issue those 250 million shares then it'll be capitalised at $8.6 million (at 0.9 cents).
On cashflows, the $270,000 operating cashflows included the one-off payment from World XChange of $562,000 (correct me if I'm wrong), so on an ongoing basis at the moment ETC is not operating cashflow positive (cash outflow of $292,000). This should improve with the ditching of the telcoms business (it would be *really* helpful if the performance of both units were seperated). Nevertheless, I expect Q3 might be a bit restrained due to telecoms closure costs. I think Q4 should be good, as the benefits of the recent acquisitions are brought together.
A guarunteed way of improving performance would be to cut executive salaries - for a company this size they are truly outrageous ($750k stock and $450k salaries to Directors...$1.2m for a company with a market cap of $6.3m!!). Perhaps if a bit of pressure were put on the Directors by hotcopper members they might oblige.
My own strategy is that I will wait for either tax year selling or the Q4 results before entering. I'll probably miss the boat but that's OK.
Just my opinion - all the best to holders.
ETC
entertainment media & telecoms corporation limited
