1) think that we'll quickly see some additional expenses such as the cost of the credit facility (if obtained), cost of being a publicly traded company (right now in an advisory capacity LUK helping out), need to add directors (right now onlyhave Cumming), etc. to the point where that pro-forma 'profit' could possibly swing to a loss.
2. think that LUK paid top dollar for Sephisto.....very high P/E and P/S multiples.
I agree. I assume the land value is a big part of the valuation here, but I don't see how one can justify paying 4 times revenues and 40 times pre-tax earnings for this company... I know they're not producing at capacity, but let's say they double production at this price you're still paying 2x revenues and 20x earnings. Maybe I'm missing something here. I guess they could be attractive to a larger more efficient wine company but that's a pretty flimsy thesis to justify buying at these levels. Long story short there's no margin of safety here.
i disagree on both of those. cumming and steinberg could have sold it if they wanted to get out. they are selling everything. they sold mli 20% below what the market price was. btw they have 2 cumming's on the board father and son. i just dont see ian putting his son on the board if he thinks the company is going to do poorly.