Let's carry your concept of altruism a step further. Are not Silver Point the true altruists under your scenario if they honestly believe Krispy *shareholders* have a "bright future" and so permitted Cooper to state publically?
Consider, after ponying up $225,000,000 at risk, does Silver now have in mind a rescue of KKD shareholders? Seeing value in the company short of bankruptcy are they really intending to share that value with existing shareholders, rather than pursue the time-honored "loan to own" strategy of their private equity brethren? A rapacious lot.
By granting Cooper an equity fee and permitting him to state publically that Krispy *shareholders* have a bright future, are not they signalling to all creditors and claimants that they can collect, likely 100 cents on the dollar? By avoiding a Chapter 11 filing, are they not avoiding stiffing:
-- the landlords on their leases?
-- the bankers on the loan guarantees?
-- the SEC for whatever fines and penalties may come down the pike?
-- the class action claimants for their due?
-- the many wee folk, suppliers and service providers usually trampled in the process?
So there you have it. If Cooper's negotiating an equity reward signals Good News for present shareholders, claimants, and creditors, in fact Silver Point is the Mother Teresa of private equity funds, to be sainted for its altruism. Mother Teresa kissed the feet of homeless lepers in Calcutta, Silver Point no less the pockets of Krispy's disposessed.
>>I think we should all thank nctarheel89 for at least trying to play the long side, even though he is really not a long. He appears to be the only one recently on this board that has tried to articulate arguments from a "long's" perspective that at least make some sense.<<
Yeah well then he shouldn't accuse superior logic of 'groupthink', when his logic has holes so big you can drive a Mack truck through. There is in fact evidence, although limited, that is being brought into the short case, but still not for the long case, and I am waiting for that - I'll need more than some shell of an equity deal while the ENTIRE PUBLIC FINANCIAL BASIS of the company is not available to the public. To make the case that the equity deal is proof of a long case for the company based on Cooper's own selfishness is to assume that that deal is the only possible vehicle of selfishness. It is not, and therefore the argument is flawed.
I think we should all thank nctarheel89 for at least trying to play the long side, even though he is really not a long. He appears to be the only one recently on this board that has tried to articulate arguments from a "long's" perspective that at least make some sense.
>>My scenario suggests that Cooper has his own self-interest in mind when he's negotiating a success fee. Your scenario suggests that Cooper is altruistic. Which seems more likely to you?<<
Why are the announced warrants the only form of Cooper selfishness that you seem to acknowledge? We already know that the deal is NOT cash, which actually SUPPORTS the BK theory (cash payment could be at risk), we KNOW that they are paid $400K ($800K) per month (which adds up to much more in CASH than the warrant deal, and is NOT at risk, as long as you can drag things out), AND we do not know about the details in the contract that would protect against a dilution strategy, nor whether there were any post-BK restructuring exlusivity clauses, etc.
Why are you not looking at all the available facts on this deal when you are claiming yourself as holding an "objective" opinion?
I see Cooper as smart, aggressive, ruthless, an experienced hard-nosed negotiator. Above all, self interested. I believe he had no negotiating position with the Board which had him over a barrel, and that he took the best he could get.
<<Current KKD shorts are getting so blinded by the mass group-think that is occurring on this board absent any hard financial information>>
oh ya? give us the hard information!
let's go, i wanna see you approximate EBITDA, cash burn, costs of delivery, cost of production, corporate overhead, interest. Let's see you analyse the SP loan docs and identify each and every event of default, and the likelihood of them occuring.
how can you talk to people like mungarian in this fashion??
people do massive amounts of research and you try to tarnish that by saying "no statements = we don't know".
Let me correct you:
no statements, YOU don't know.
no statements, we do know.
Anybody who knows more than a little something about business and finance and the econmics of wholesale and retail, brand name food business and real estate can aproximate figures for this piece of junk company.
It may not be exact figures, but do financial statements offer exact figures??? you seem to know a lot about corportae scandals and accounting, so i'll let you answer that question on your own.
Your post was not addressed to me, but I find it interesting.
I would be FAR more inclinded to accept your suggestion that shorts are blinded...If KKD had not already admitted that it has lied to investors from the very beginning. KKD has shown no indication that it wants to stop doing so in the future.
So, if anyone is "blinded", I suggest that the longs are the more likely candidate.
This house of cards has remained standing far longer than I ever expected. And, it may continue to surprise me. BUT, no long has ever suggest any logical means for this company to prosper (or even tread water) in any meaningful future projection.
Listen, mungerian, I've researched this stock since it went public. That's right - long before you ever appeared here. I've been a long-term short of KKD. I know what is going on with the company. I am very financially saavy, and I am not lazy. Current KKD shorts are getting so blinded by the mass group-think that is occurring on this board absent any hard financial information, that they refuse to look at things objectively. I'm suggesting that the shorts proceed with caution, and you would be wise to do so.
<KKD has issued no financial information for 10 months, and they haven't announced a restructuring plan yet. You guys have no clue whatsoever what is actually happening with the company in the grand scheme of things.>
Those of us who have the competence and have taken the time to analyze this company have a pretty good idea of what's going on with KKD financially. It's not that hard a business to model in terms of cash flow. The continued decline in same store sales, the recent financial crises in KremeKo, Sweet Traditions and Lone Star Doughnuts and recent store closings all confirm the analysis I've done and posted on this board since last fall. I constantly look for contrary data points (as opposed to management spin) that suggest my analysis is off base and haven't seen them.
With this suspension of financial statements, guys like you who haven't done any analysis can suggest they're on equal footing with the people who have done the work. It's a good rationalization for laziness.
You are correct in most of your post.
In fact, I am so intrigued by what Cooper may or may not have up his sleeve that I will not look for the fast resolution.
In fact, I am willing to risk my put stake and wait it out till 2007 to see the magic.
And, if it really is magic, I will be glad to pay the cost of admission.
However, I seldom am wrong when I smell blood and I believe KKD is bleeding badly.
Thank goodness I don't time the market (any more.)