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Boulder Brands, Inc. Message Board

  • hottie362534 hottie362534 Nov 24, 2010 10:23 AM Flag

    Going private?

    Any bets that this company will be taken private like JCG? Especially with the price down. They won't want to wait until the milk takes off!

    Motley fool bashing now? I like it!

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    • All in fun. I invest for fun, even though I really enjoy the money.

      Good point on tax loss selling. Many more stocks up, some profoundly in 2010, than losers. People will be looking for stocks they consider non-core holdings that are underwater and sell them to help offset gains from most stocks. Then they can come back in early next year on speculative plays.

      I smell opportunity here with SMBL - in fact it is perfect for that trade!! May test the $3.40 - $3.50 low area. If so, I buy more and wait for the January - February effect. I actually made money trading SMBL this year within a tax deferred account.

      I think SMBL does not report until mid February. They seem to trade up in the 12 - 2 day range before earnings. They may have a little momentum now for earnings, so this quarter may be good (for SMBL - all relative).

    • Don't be so hard on yourself Harry.
      Bad things happen to good people.

      I traded a small bank in and out for 5 or 6 up/down cycles, profitting on each trade - only to get in "one last time"!
      Lost all my priciple, all my "profits", then threw in a thousand more just to make the loss bigger than my first decision on what to risk.

    • I don't see how the SEC can allow companies to go private and shut out shareholders at some arbitrary price. It should be illegal. At the very least, a company going private should be required to pay shareholders the buyout price/share or what they paid/share, whichever is higher. Also, management shouldn’t receive or be offered anything extra (now or in the future) to push the takeover along, which is what usually happens and is a total conflict of interest. We the shareholders are the ones that gave the company the capital to get going. There is no way we should be forced out at less than what we have invested. What a total load of crap. Hopefully the management of this company will at least consider the current owners (us) before they flush us down the toilet. We saw an opportunity with SMBL and believed enough to buy stock. If SMBL eventually succeeds, those of us going long should see the benefit, not some big money players taking over companies to feed their greed. It’s never happened to me and I hope like hell it doesn’t start with SMBL. I don’t see how it can be legal, but thanks for raising the issue over and over and causing my BP to rise.

      • 1 Reply to harrypyeeter
      • Welcome to SMBL Harry!!!

        I do not think SMBL has a chance at going private except maybe the slight chance of a management LBO.
        Due to the small size of this company, and their stock holdings, it would at best be at a 20% premium.

        For a professional private equity group, SMBL offers nothing. They buy a company to strip out cash and the value of assets to pay dividend to themselves.
        The diviudends are always substantial and the cash replaced with loads of debt. SMBL has a good deal of debt already and little cash or hard assets (they farm out most R&D and all production). There is nothing to buy but some current products, some product ideas and marketing plans, and an increasingly known brand name (probably SMBL's stongest point). The value in SMBL is currently all intangible, with only promises for the future.

        For those reasons, no private equity will be interested. For a management lead LBO, there is little incentive except to maybe not need to be transparent. Management is already well compensated. They will receive a tremendous number of stock options (no cash needed by them personally) over the next 3 years. Go back to the prospectus issued last winter for the "special meeting" that supposedly was approved by a shareholder majority!
        Anyone who "invests" in SMBL and does not read and understand that prospectus is a fool!!! Short term trading - OK.
        The options could add up to 20% and more of the current 66 million share stock float. To cover execution (cashing in of the options if stock price goes up,) SMBL needs to buy back 10 - 15 million shares for the company treasury to cover that future compensation. They will spend any and all free cash flow to buy those shares so stock option grants are eventually covered. SMBL will build no cash hoard, gain hard assets, or pay a cash dividend.

        There is nothing in it for management to want to own this company by spending their own money or putting loans on their backs. They already have a great deal for the near future. They could eventually have 20 - 25 % of the current outstanding shares promised to them within 3-5 years - WITHOUT SPENDING OR RISKIG A DIME OF THEIR OWN MONEY. shareholders will bear that expense (eventual effect on earnings) unless they trade out when company buys (you need to mostly guess) and get back in after the earnings hit is public.

        Hottie, if you want to get some excitement going, move to speculating on a buyout by a Kraft, Nestle, Unilever or Conagra. That could occur. Big companies like to swallow up little brands as add ons to a current product line. SMBL already did the hard work to get a brand name built and recognized. That is expensive and takes time to do. A large company may feel it is worth it to gain control of the names, products, and product ideas, then go and slot in and build all out through their marketing, sales, production and distribution chain.

        Going private - not in the next 5 years!!!

    • Very likely. Already a cash cow, if you exclude the advertising on new launches. Very inexpensive but valuable brands to buy up.

 
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