All in all, there are many problems for prospective XELA stock investors to consider, and they should look for other technology businesses to put on their watch lists. ![]() Plus, the company is reducing its costs, but this probably won’t be enough to fix Exela’s financial issues.įinally, Exela Technologies’ proposed reverse share split might help the company avoid an immediate delisting, but that’s not a permanent solution. What You Can Do NowĮxela Technologies is unprofitable and is adding to its debt burden. This potential reverse share split would be “at a ratio in the range of 1-for-100 to 1-for-200.” It’s a quick fix that won’t actually improve Exela Technologies’ fundamentals, and some people will see it as a sign of desperation. The company disclosed that Exela’s shareholders will vote on a proposed reverse stock split. To remedy this situation, Exela Technologies is using the same old playbook that many other troubled businesses have used. The exchange could delist the stock because it has closed below $1 for a prolonged period. The Nasdaq exchange has already sent Exela multiple noncompliance notices. Meanwhile, XELA stock has fallen very far, very fast. Thus, $51 million of new funding (which will have to be repaid with interest) and $65 million to $75 million of cost-cutting won’t make a big enough difference. XELA Stock Investors Have Numerous Problems to Worry AboutĮxela Technologies’ most recently published Form 10-Q revealed that the company had around $1.1 billion worth of total debt. The funds from Exela’s “new securitization facility” will have to be paid back with interest. It’s really just an addition to the company’s debt load. Don’t assume that this is free money, though. 2010 - Road to Nowhere -, 32 Add OpenSub search Step 1 Click the 'Accept and +Add' button to download OpenSub search Chrome Extension. Recently, Exela Technologies disclosed $51 million worth of new funding. The company expects to achieve savings of $65 million to $75 million this year.Īnother old trick is to get a quick capital inflation as debt. ![]() ![]() Among the company’s plans are “headcount optimization” and “real estate reduction.” Hence, Exela will have to operate with fewer workers and less space, which won’t be easy. Ultimately, these tactics will probably be too little, too late for the company.įor instance, Exela Technologies proudly announced several cost-reduction measures. Exela Technologies is trying some of the oldest tricks in the book to shore up its finances.
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