Since March 2022 NASDAQ: XELA has been plunging continuously towards $0.10 as stockholders have been selling off due to negative EPS and lack of revenue potential. Four hours ago Exela announced it has got a $136 million XBP contract from a customer who practically needs optimized billing and payment solutions.
If Exela receives the truly big $136 million in cash this month the holders may receive dividend paychecks. However, top-level management might decide to repay debts or acquire new assets.
There is no clear possibility that positive earnings may show up in the Q2 financial report. However, a strong balance sheet could possibly encourage visionary holders to keep XELA shares.
The recent gigantic contract might encourage more buyers to flock in because they might think the positive earnings are around the corner while more than 4000 customers use Exela’s services in 50 countries. The company is still not fully expanded due to 145 countries do not have Exela’s services yet.
As the consumer economy is expanding in developing countries Exela has big opportunities to expand and enjoy more earnings as its customers directly engage in retail and wholesale businesses. Due to hard macroeconomic conditions Exela may cease expanding and start cutting costs to optimize cash flow. During the recession, everybody needs physical cash.