Steal Partners does not have a good reputation... They did the same with Adaptec...
SEC should have a close look at how they operate...
Good thought...certainly the 2/13/2015 date meant something...could have to do with 4th quarter earnings but the timing of the HNH acquisition and rev split fits neatly in this time frame.
If they want more shares why not just buy the whole one million at an agreed upon price,,,why put it on the open market...are they just going to support the price or are they looking for cheap shares (at or about 3.60) and do not want to drive the price up? So spread it out over several months.
This $3.60 range seems to be were we are until some news...
Today's reverse/forward split news crystallized a question I had about a previous move on the part of H&H - namely their announcement that "During the period commencing on the date hereof and ending on February 13, 2015 (the “Share Acquisition Period”)" they could increase their MLNK holdings from something like 28% to 45%.
The company's stock transfer agent will aggregate holdings of less than 100 shares and sell that total [around 1M shares] on the OPEN MARKET - i.e. , the company is not retiring those shares. Additionally,
"The Company’s transfer agent will limit the effect of the sales of Aggregated Shares on the market price of the Company’s common stock by limiting its daily sales to 25% or less of the trailing 30-day average trading volume preceding the effective date."
Looking back over the past 30 trading days, I came up with an average of approximately 180,000 MLNK shares traded per day. IF the transfer agent were to sell those aggregated shares in 1 day, it could very well put downward pressure on the share price, so they're only going to sell small amounts over an extended period. Assuming that the 30-day average rises to around 200,000 (some slow days are dropping off the other end), 25% of that would mean they would sell around 50,000 shares (or less) a day. At that rate, it would take around 20 days to sell off 1M shares. Now, think back to the "Share Acquisition Period" in the H&H announcement which ends 2/13/15. February 13 is 20 trading days after the Jan 16 effective date of the reverse/forward split. I believe that means that H&H will be in the market possibly buying those shares. If they are buying, it should provide support of the share price - and they'll no doubt be able to increase their share holdings, possibly cheaper than if this 1M-share block was not overhanging the market. So I don't believe the “Share Acquisition Period” was coincidental, though I can't be sure that H&H won't do share acquisitions over & above that 1M.
stockexpert, the company says that it will eliminate some of the expense incurred in communications with the group of shareholders with less than 100 shares. Here's the wording from their proxy statement:
We have a large number of stockholders that own relatively few shares. Specifically, as of October 17, 2014, approximately 59,400 stockholders (including approximately 1,804 of 2,499 registered stockholders) held fewer than 100 shares of Common Stock in their accounts. These stockholders represented only approximately 2% of the total number of outstanding shares of Common Stock. Continuing to maintain accounts for these stockholders, including expenses associated with required stockholder mailings, costs us at least $175,000 per year.
In MOST cases, the words "reverse split" are poisonous with regard to a stock's price. In this instance, since the reverse split was not effected to avoid delisting or other financial problems, and could result in cost savings down the line, it seems to me that the impact will be positive for the share price - long term. It appears that H&H/Steel Partners are putting various pieces of a plan in place to realize the value here. Their move to provide management services to MLNK could be another part of that plan.
The short term effect on the share price MIGHT be slightly negative, although it looks as if H&H has moved to mitigate that effect as I will try to illustrate in my next post. Remember, too, that MLNK's share price has moved up something like 30% in the past month - though that was from a low point in mid-December.
I would like to know what this "reverse/forward split set for Friday" will impact stock price moving forward.
Is this good for the shareholders or bad?
Check the news for details. They're saying they estimate around 1M shares will be "aggregated" and sold on the open market. Takes effect on Jan16. It appears to me that this presents H&H with an opportunity to pick up another 1M shares. The mechanism is described in the PR here:
The Company will arrange for the disposition of fractional share interests of stockholders who hold fewer than 100 shares immediately prior to the Reverse Split by having the Company’s transfer agent aggregate such fractional share interests and sell the shares of Common Stock resulting from such aggregation (the “Aggregated Shares”) in open market transactions following the effectiveness of the Forward Split. The Company’s transfer agent will, following completion of the sale of all of the Aggregated Shares, pay to each registered stockholder who holds fewer than 100 shares of Common Stock immediately prior to the Reverse Split an amount, for each share of Common Stock held immediately prior to the Reverse Split, equal to the average per-share price received in the sale of the Aggregated Shares. The Company’s transfer agent will limit the effect of the sales of Aggregated Shares on the market price of the Company’s common stock by limiting its daily sales to 25% or less of the trailing 30-day average trading volume preceding the effective date.
Should be interesting to see what transpires.
H&H filed an amended Form 13-D tonight detailing their MLNK holdings. At the bottom of the form, they listed more buys they had made in the past 3 days:
37,884 shares @ $3.5999 on 01/05/15
40,049 shares @ $3.5834 on 01/06/15
10,600 shares @ $3.5968 on 01/07/15
H&H now claims direct ownership of 563,838 shares. All told the filing shows that H&H, Steel, WHX, and related parties:
"This statement reports an aggregate of 16,700,879 Shares, including 2,000,000 Shares underlying currently exercisable Warrants, beneficially owned by the Reporting Persons, constituting approximately 30.9% of the Shares outstanding."
Looking at the recent H&H purchases, I'm struck by their ability to keep their buys under the $3.60 mark. At some point one would think that the supply of cheaper shares would dry up forcing the share price to rise a bit.
sound right. also don't forget the 1 billion dollar NOL that mlnk has and that hnh & sp can use to shelter their profits against these losses.
I agree that the 45 percent is to keep away for the change in ownership rules of Sec 382...but the 2/13/15 termination date seems to suggest there is a window for HNH to acquire a lot more shares....and they have been....
Why? Acquisition coming? Positive quarter?I try to see a down side but HNH's actions seem very bullish...not sure who would sell this cheap at 3.60 maybe some traders who got in at 3.00 not so long ago.....but if you have been an investor way sell now?
Maybe a fund wants out and HNH will take the shares..we are just missing facts that may come clear in a few weeks.....
Amendment 1 continued:
the Stockholder and its Affiliates (including HNH) shall be permitted to acquire (i) the Common Stock underlying the Warrants set forth and in accordance with the terms of the Warrants and (ii) securities as a result of, or offered pursuant to, any share division or split, share consolidation, stock/share dividend or equivalent under Delaware law, combination, recapitalization, rights offering or similar events.
Because the amendment has a Feb 13 deadline, it would seem to me that H&H/Steel would have to do a LOT of buying in the next 5 weeks. Perhaps they could buy a block from one of the other big institutional holders, but it's hard for me to see them hitting that 45% mark. I'm sure it was set at that to avoid the Section 382 restriction, so maybe it's an absolute cap and not an indicator of what H&H will actually acquire. Regardless, it appears we may be seeing some movement here in the next few weeks.
555, in addition to the Form 4 filing last night, there was one giving the details of the "Protective Amendment" intended to preserve the NOLs. One very interesting part of the filing is Amendment 1:
(a) During the period commencing on the date hereof and ending on February 13, 2015 (the “Share Acquisition Period”), without the prior consent of a majority of the Continuing Directors or except as otherwise expressly provided below, neither the Stockholder nor any of its Affiliates shall acquire, or propose to acquire, “beneficial ownership” (as defined in Section 13(d) of the Exchange Act) of any equity securities, or rights or options to acquire any such securities (through purchase, exchange, conversion or otherwise), of the Company, including derivative securities representing the right to vote or economic benefits of any such securities, provided, that the Stockholder and its Affiliates’ ownership in the outstanding Common Stock of the Company shall not exceed forty-five (45%) of the then outstanding Common Stock when combined with other Equity Interests of the Company beneficially owned by HNH, the Stockholder or any of their respective Affiliates as of the date hereof (after giving effect to the transactions contemplated by the Investment Agreement (excluding the issuance or exercise of the Warrants)) (which, for purposes of such calculation, shall include shares of Common Stock issuable upon conversion of then-outstanding preferred stock) (the “45% Cap”) during the Share Acquisition Period, provided, however, that, notwithstanding the foregoing restrictions (including, without limitation, the 45% Cap), ...
Not sure if this is a creeping acquisition to get around the NOL rules or they believe goods things are about to happen...
What do you take from the management deal that looks to consolidate the upper management functions? The filing references growth from acquisitions...are we getting close to a deal? I assume this will allow for CFO/Treasurer functions to be shared with several companies. Makes sense and does not seem to be SP pulling a "fast one".....
I still cannot see additional HNH purchases as anything but positive.....
Sentiment: Strong Buy
12/31/2014 22,550 shares @ $3.5979
01/02/2015 32,470 shares @ $3.6
That brings H&H's direct ownership total to 475,305 shares.
WHX CS Corp. (100% owned by H&H) has 5,940,170 MLNK shares.
hnh and sp will take all mlnk profit using tricks like side deals and leave shareholders with nothing. This is their plan to benefit on the expense of others. who can stop them given they r the insiders and control the board? do u think SEC is willing or capable of doing anything?