"EBITDA positive" does not mean profitable, or even necessarily financially stable.
Right you are. So please let me clarify my earlier statement (that "PAIX has been modestly profitable for years"). If we were not a wholly owned subsidiary we would owe income taxes. When we have been wholly owned by companies who were paying income taxes, some of the taxes they had to pay were because of PAIX. (Presumably this positive our income situation will make it easy for MFN to sell us.) Let's have a look at Extreme Networks' recently published financials. (Bring up http://biz.yahoo.com/fin/l/e/extr.html to follow along.) These folks showed a net loss this quarter yet the analysts applauded them and their stock shot up a bit because they had a nonrecurring charge larger than their net loss. This tells analysts that the company would have taxable income if not for the nonrecurring event, which gives them hope for the next quarter. On http://biz.yahoo.com/fin/l/e/extr_ai.html we even see that in the year ending July 2000 they paid $10M in income taxes, which tells us that maybe they know how that feels and want to do it again some day. I like EBITDA as a yardstick for measuring one company against another if they are otherwise similar and I'm looking for a differentiator. But I don't personally buy stock based on EBITDA numbers -- I want to see actual net income and, paradoxically, I love a company who has to pay income tax because it means they had INCOME to pay taxes on. -- Paul Vixie <vixie@eng.paix.net> President, PAIX.Net Inc. (NASD:MFNX)