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Bleak future for Pebble Beach
Shareholders in beleaguered broadcast technology firm Pebble Beach (PEB:AIM), formerly known as Vislink, are almost certainly facing a painful sale process that could leave their stock virtually worthless.
The divestment of its Vislink Communications Systems (VCS) business to NASDAQ-listed XG Technology has failed to shore up the threadbare balance sheet and the company anticipates breaching its banking covenants in the ‘foreseeable future,’ casting the company’s very existence into doubt.
Shares twice warned of the threat that the VCS sale may not provide the silver bullet solution to Pebble Beach’s debt problem. We first flagged possible problems in October, and again in January. Since then the company’s share price has collapsed from 16.25p to 4.62p.
Developments finally came to a head on the publication of full year results to 31 December 2016. ‘The results confirm below-expectations performances across both the Pebble Beach and VCS businesses,’ says Rob Warensjo, analyst at the IT analysis group Megabuyte.
The company’s ‘future appears uncertain, and very much reliant on the lenience of its bankers,’ Warrensjo concludes.
Shareholders can do little more than cling on in the hope that their stock proves to be worth something more than nothing.