eLEC communications (OTCBB:ELEC) is a company we like. No we are not buying the stock, or recommending it. But we find this story interesting, and won't give it our usual thumbs down.
Lets start with the reasons why we are not buying any of this stock. Sales at this company are on a long term down trend. The last four quarters were straight declines in sales. There announcement is a little vague because they did not give terms or file an 8-k. Therefore, we have no idea how this transaction will impact the balance sheet.
Here is what we like about eLEC. They have over 1 million in the bank to execute their plan. This really isn't much money but it is something. Hopefully this sale will cut some expensenses and bring in a little cash. There are not too many shares outstanding. The market cap at this point is only about 8 million.
With the right execution, they have a chance at success. Not very good odds, but management has enough resources to execute. And the market value of the stock is low enough to leave room for very attractive upside.