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The OTC Journal has started 2006 out with a bang. New idea Bad Toys made a new all time high today and traded big volume for the first trading day of the year. Here are two important thoughts on Bad Toys: 1. Please review the comments in the BLOG. There are some very good questions, and you should know the answers, and 2. I expect Bad Toys to trade down once it trades x dividend. I know the 1.3 shares of Southland will be awarded to shareholders of record the morning of January 12, but I don't know when it will trade x dividend. When it does, I expect the stock to drop. However, hopefully you should more than make it up when Southland trades on its own down the road.

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TelePlus (OTC BB: TLPE) Acquires Liberty Wireless

They say information is power. Having information and being willing to act on it when no one else is paying attention can put profits in your pocket.

99.9% of investors are out of touch this week, focused entirely on the back half of the Holiday Season. Since you are reading this, you might be in a position to act out in front of the rest of the world.

TLPE did not take last  week off. They are adding another building block to their rapidly growing and profitable business. Today's acquisition takes them one step closer to the $55 million and $4.6 million in EBITDA '06 forecast.

TLPE was out with some rather significant news post close today. They have purchased Liberty Wireless and all that goes along with it from NASDAQ wireless services wholesaler InPhonic (NASDAQ: INPC).

The purchase price from Liberty Wireless was $1.9 million- $1.4 million will be paid immediately out of TLPE funds, and the remaining $550k will be paid in four equal quarterly installments.

Liberty Wireless is a relatively high profile provider of cellular services to under served populations. They resell for all the major brands including Verizon, Nextel, Cingular, T-Mobile etc. According to the headline of the press release, Liberty is the third largest reseller of Sprint wireless services, behind Virgin Wireles and Qwest. This acquisition is the first MVNE (Mobile Virtual Network Enabler) program under the TLPE umbrella of companies. The MVNE business model has proven very profitable in Europe.

InPhonic has decided to sell the brand in order to focus 100% of its efforts on the wholesale side. Liberty Wireless was their retail division. In the transaction, TLPE picks up all the customers, domains, accounting systems, records- basically the whole package.

TLPE has become what Wall Street's describes as a "Leveraged Buy Out" or LBO company. They have taken on debt at reasonable terms, and are using their cash to buy profitable businesses which fall within their core competency. Taken on an individual basis, these businesses are pretty small. However, add them all together and put them under one umbrella, and you get economies of scale on overhead. You also have the potential to get market recognition and an enhanced valuation for the sum of the parts down the road. Perhaps be bought out by a major at a premium for shareholders.

Despite not being stated in the press release one thing is fairly certain: Liberty Wireless is a profitable company. CEO Marius Silvasan only buys profitable companies for cash. No dilution to shareholders.

After we ge a little further into 2006 there will be a lot more information available on the Liberty Wireless acquisition. In the meantime, TLPE can probably be accumulated before many people know or understand the significance of this event. Use your knowledge to put some profits in your pocket.

Here is the complete text of today's press release:
 

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