FSNN is using EBITDA as its measure of success and

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 .)

Read more:  http://www.investopedia.com/articles/fundamen...z261AkeuFf