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Zale Corporation Message Board

  • billberggren billberggren Feb 25, 2010 11:21 AM Flag

    short at 2.86 what a joke - blowout earnings

    The earnings were blowout. Coveed all you want zlc will be 10 by summer.

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    • Nothing has changed yet....current management is simply a leftover from prior CEO....wihout the tax credit they took, they would be in the red...as usual. They have by no means turned a corner.

      They need a new refreshed management team that has successful jewelry experience, backed by an investor who is serious and in it for the long haul...not for the quick flip.

    • I do know this from personal experience as a vendor working with both companies. At the store level you cannot compare zlc to sterling. Sterling is much better at obtaining sales than zlc.

    • Common$$ -What new management team are you referring too? I don't disagree that this company has a strong brand and a great deal of upside now that most of the weaker competitors have been eliminated. I'm just not sure what new team you are referencing? The acting - CEO is an HR guy who was a part of the team that just left, underling to the former CEO. I don't know him or his abilities, but, he's not a turn around guy?

    • or better still what prevents an investor from coming in after the company files chapter 11 ?

    • see the etrade capital raise over the last 3 years...you will know who has the upper hand when it comes to capital raise for a business in trouble

    • "anyone can buy the asset publicly at a very low price on the open market, however this would be very risky because it doesn't directly help the company in any way. Zales would still need capital and the open market purchase would essentially become worthless as the company would still have the same problem. "

      true what prevents an investor from taking say 30-40% in open market by throwing 100 million and then coming up with any capital assistance say another 100 million to help the company ?
      every investor is trying to maximize his interest..

      I still don't get which investor would be interested in investing in 10 year long term warrant of near bankrupt business that is doing so bad for so many years. I personally think this is VERY UNREALISTIC. but we are entitled to our opinion

      The capital raise will be
      1. at a discount to market price(see my prior message)
      2. the investor would get an immediate(no warrant) stake
      3. the investor would get many seats on the board...in fact investor would pretty much take control with bredeen

    • "zales customers just dont have money ...and this is a discretionary item.....now i don't understand why signet is showing high single digit same store sales increase...do they have better products or better pricing or better branding ? "

      Do you realize what your saying is a paradox. Customers don't have money on discretionary items, but signet has high single digit same store sales increase. (cancels each other out) Its nothing to do with customers not having money. Its the strategy of the business. Zales business was run awfully as they couldn't control their inventory and advertising costs were off the wall. Things have changed. Different leadership, and they are controlling inventory and advertising costs. Don't let the media fool you about customers not having any money. I work for the number 1 specialty retailer in the world and we have been beating our sales goals by leaps and bounds every day for the last three months. People have money and they are spending it.

    • sorry, I guess I over reacted. You keep throwing the experienced investor thing in there. I guess that threw me off.

      "All I asked was "which dimwit will buy an asset at high price privately when he can buy the same asset publicly at very low price" ?"

      any way the answer to your questions is. anyone can buy the asset publicly at a very low price on the open market, however this would be very risky because it doesn't directly help the company in any way. Zales would still need capital and the open market purchase would essentially become worthless as the company would still have the same problem. With a private placement, Zales gets the cash directly. Zales issues warrants or notes to the ivestment firm. Zales then has enough capital to sustain the process of turning the company around. Zales has a lockout period of 10 years on the warrants, or maturity on the notes. The investment firm would benefit greatly as this move could cause the stock to appreciate 1000% or more. Like a large stock option. It would only be dillutive in the future.

      Another thing on the dillution. Zales is priced for bankruptcy right now. So even if they did a shelf offering to raise captital and dillute the shareholders, the stock would probably surge on valuation with the dillution, just because it is so underpriced.

    • be a bit thickskinned...i didnt insult you !!

      All I asked was "which dimwit will buy an asset at high price privately when he can buy the same asset publicly at very low price" ?

      say they need to raise 200 million ...and an investor wants to participate. he has 2 options

      1. buy common stock in open market at 2.5$
      80 million shares and own 73% of the company
      very dilutive for existing holders


      2. negotiate with company and buy at 5$
      40 million shares and own 57% of the company
      still dilutive but not as bad as option 1


      which option would the investor choose ?

      Hope u get the point that considering the amount of capital they need and considering where the stock is trading at, capital raise is going to be very dilutive

      i have never seen a capital raise that is at higher to the market price...In fact it is always at a discount to the market price..

    • enough with the direct insults buckwheat. If a private placement occured now and zales made a turnaround and the share price went back to the average range of $30/pps over ten years. The private placement would be unlocked with a 1200% return. and could then convert into common after the company has regained its strength. It wouldn't effect pps as drastic. It would be a win/win. I think your the sucker with the other 30% that are short on the float of ZLC. Zales is one of the most recognised names in Jewelry and with some tweaking of the way it is run we will see a huge turnaround. The company is a great company, the management wasn't, that has changed. If you are short this one at this point you are a nimrod. I have been invested for years and have very good returns as well as rankings. My investing partner has worked on Wallstreet for 20 years as a market maker. So cut the experience crap. talk about the material facts with the company or shut up.

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