The stock reacted poorly to the news this morning contained in Avaya's 8-K Filing (can be viewed at https://investors.avaya.com/financial-info/sec-filings/default.aspx). I don't know all of the ins-and-outs of the content, but sure sounds like a heap of bad news for Avaya. Not that much/any of this was surprising, but would love to get some candid thoughts here that we can't get internally...
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Certainly reads like C11 is pending short of any sort of agreement from lenders, which doesn't sound likely
Page 72: The restructuring transactions…through confirmation of a pre-negotiated chapter 11 plan…
Overall, Chapter 11 is mentioned 19 times in the doc. Not a good sign.
Page 71 seems to indicate RingCentral forcing a Chapter 11. The Dec 8th, Court filing (Section4) is that a correct understanding?
With what we now know I don't think we can trust any of the quarterly numbers from the Subscription / ARR era......
On page 32, GAAP revenue
Proj FY 2022: $2472
Proj FY 2023: $1863
Ouch
What is the REAL concerning is they estimating this Q4 revenue to be between $460-$480 Million. Q4 has historically been our best quarter and last years Q4 was at $760 Million. That is a major decline in one year assuming the $760 Million 2021 Q4 number was even accurate/real.
Chapter 22 baby!
Reacted POORLY?! Down 30+% in the minutes following the filing... I'd say poorly indeed.