FSNN is using EBITDA as its measure of success and valuation. The current rationale gives 40 times EBITDA for the telecoms industry. The Acquisition brings in $26.5M revenue and $3M clear profit, Just taking the profit, gives a valuation of $120M USD at acquisition. You smiling yet?

Below is a brief snapshot of EBITDA. $0.80 cents, walk in the park

EBITDA
EBITDA , or earnings before interest, taxation, depreciation and amortization, is a popular measure for evaluating the profit performance of companies with large capital expenses . Firms that have invested heavily in rolling out a new fiberoptic network, for instance, will typically report big losses in their earnings statements. EBITDA lets investors determine whether the core operating business - without the effects of capital expenditure (CAPEX) and interest payments - is making money. It gives investors a convenient metric for comparing the profitability of companies that have different capital investment patterns. (Delve deeper into this calculation. Check out A Clear Look At EBITDA .)

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