What ever happened to David Baazov’s offer to take Amaya private for C$21 a share? That was back in February with shares trading in the $13.25 area, with a 5% position taken for the model portfolio . We are now at $14.76 thanks to a good earnings report that included higher revenues, more registrations, and a more than doubling of its earnings per share year over year. The question with Amaya was never centered around if it could grow. The real question was, and still is, if it can grow fast enough to pay off its rather large debt.

For the leverage that Amaya does have though, the situation is not too bad, at least not imminently critical. As of last statement, the company holds $3,719,904,000 in debt to be exact, and a market cap of $1.97 billion. That puts leverage at 189%, which is a lot, but most of that debt is not due for a long while. Over $2 billion of it is due over five years from now, and only $1.14 billion is due within the next three years. That’s still a lot and that will be hard to pay off, but it is doable through an equity financing, which would be bad for shareholders, or perhaps rolling over the debt. Most likely though, it will be dealt with by taking the company private again within the next 3 years.

What’s the holdup on the offer though? Probably the fact that Baazov is now in hot water over insider trading allegations. This puts both sides of the Amaya public/private convoluted business in a strange situation. On the one hand you have the Scheinbergs, the original owners of PokerStars parent Rational Group, who probably want to do business in the US without being on the books and may be using Baazov as their proxy because the Scheinbergs are guilty of doing business in the United States illegally. But now we have Baazov himself in trouble for equally inane reasons, this time from Canadian authorities for basically being too shrewd and shareholders are complaining about it. Regulators always need someone to chase in order to look busy rather than be caught watching porn all day.

Though it was US regulators who have the documented porn problem, things can’t be all that much different in Canada, where reportedly 20% of residents in the country’s capital where all the regulators are had Ashley Madison accounts. Perhaps instead of annoying David Baazov, they should go back to watching porn. That way Canadian taxpayers will only be paying them to waste time rather than to attack businessmen who provide them with goods and services.