IO - ION Geophysical Corporation - Review Of Strategic Alternatives Is A Cause For Concern

• Company suffers from ongoing weak seismic data customer demand in its core offshore oil and gas segment.
• H1 results came in well below management's expectations with a negative free cash flow of $32.7 million.
• With limited cash available, its credit facility effectively maxed out and the requirement to repay approximately $7.5 million in bond debt in December, ION needs to raise additional funds soon.
• Recently initiated review of strategic alternatives unlikely to be successful given the dismal state of the core business and the company's substantial debt obligations.
• A short position could yield decent results but sky-high borrowing rates are likely to keep even speculative investors sidelined at this point.

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