VeriFone Holdings, Inc. (NYSE: PAY) made an SEC filing showing that its wholly owned subsidiary, VeriFone, Inc., has scheduled a meeting with the lenders party to its Credit Agreement that was dated as of October 31, 2006, as amended by a First Amendment dated as of January 25, 2008.
The borrower, VeriFone Intermediate Holdings, Inc., JPMorgan Chase Bank, N.A., as Administrative Agent and Swing Line Lender and as an L/C Issuer, Bank Leumi USA and Wells Fargo Bank, N.A., as Co-Documentation Agents, Lehman Commercial Paper Inc., as Syndication Agent, and the lenders from time to time as party thereto.
Verifone has scheduled this meeting to seek a further amendment and waiver to the Credit Agreement that would provide it with an additional extension of time to comply with its obligations to furnish amended financial statements for the fiscal quarters ended January 31, 2007, April 30, 2007 and July 31, 2007, annual audited financial statements for the fiscal year ended October 31, 2007 and subsequent quarterly financial statements.
Unfortunately, VeriFone has been having more than just troubles. Shares are down about 1% today at $12.03, barely above the $11.70 low over the last 52-weeks. If you want to see an illustration of pain, this stock traded as high as $50.00 last year.
We first advised readers to avoid jumping in after on that first major drop because the issues seemed worse than the company was letting on and drops of that magnitude almost never see a v-bottom reversal. We have reviewed this one over and over for our own Special Situations newsletter, but the problems have so far been to great to call an all-clear sign. Using any traditional analysis on this company is currently impossible, so anyone wanting to evaluate the stock has to first start with the value of its entire payment transaction network, and then go in and back out the full liabilities plus an interpretation of how much it’s going to probably have to fork over for all the investor suits and potential fines. The translation for that is "financial voodoo."
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Jon C. Ogg
April 18, 2008