Isn't it about time that someone is held
accountable for the performance of this stock? I understand
that it has run up from less than $3 but please
remember that it was also $10 last year, without the
benefit of any real help from ComAlliance, Paramount,
Warner, new Line, the "internet Play", etc..
really disappointed in the wording of the press release,
the lack of follow through with any sustained buying,
the overall management of the stock price (or lack
thereof), and the incredibly poor public and investor
The really good news is that the company has the
potential to be much better and stronger than the market
thinks it is. The bad news is whether the current
management can pull it off. So far, it does not look very
promising. This too might not be ultimately bad either if a
stronger group can come in and take over the company. This
does not really represent a turnaround play. Instead,
it is more of a maximization of what is already
The annual meeting is on August 23 in Portland. I
sincerely hope that all interested parties will attend and
make their concerns known. If we do not get the
response we deserve, maybe instead of dumping the stock,
we should make some management changes that can
deliver the true performance that this compnay is capable
I am interested in any feedback regarding this
posting. I also would like to know if there are any
shareholders who are interested in discussing what we can do
on a more proactive or aggressive basis. I will keep
track of the ideas and postings and provide sumary
updates as we get closer to the meeting.
I believe the company is poised to deliver stronger
earnings and significant growth if they can deliver on
their promise. However, I am not convinced the present
managament team can do it, particularly the way they are
If there is a buyout, don�t expect it for the
whole company. Currently the sum of the parts is worth
more than the whole but don�t expect someone to buy
the whole and split it up. There is a buyer for the
domestic PPT business right now. Can they come to terms?
That is the big question. It won�t sell for less than
Rentrak Japan: What is 10% of a $200
million/year business worth? We will find out in a few months
when it goes public in Japan. That will give it
valuation and some liquidity.
ComAlliance: Should go
public in a few months also. This is the home run. This
will be the remainder if the other parts are
Hollywood lawsuit: How do you value this? Will Rentrak get
the big enchilada or just the money Hollywood still
owes them? It is either substantial or gigantic. This
will remain with the company even if PPT is sold.
can anyone describe the rent poison pill, how it
works, and what the financial implications are for a
company that has to swallow the pill. Is there provision
for setting it aside? Thanks for the thoughts on the
>"...could be a buy out
Please say what you mean here: A buy out by whom? Why
>"...But then they would be in a
position of supplying their
Blockbuster already owns an option on 1,000,000 RENT shares,
so that's obviously not a problem for them. HLYW
could buy a controlling 51% (5.3 million shares) of
RENT in the marketplace for only $37 million at the
$7/share price you mentioned. (absent any poison pill
intervention). If HLYW controls rent, they also control what the
independent stores get, and adds RENT's revenues to their
financials. Since they don't have the dominant share of the
market, there aren't even any anti-trust issues, though I
doubt the independents would like it.
can stop them with the poison pill if he wishes. He
would do that unless the offer is so very high that
shareholders pressure him to sell."<
Rentmeister, that's the whole issue. If it's a choice between
just giving RENT up to $50 million, or spending $50
million to buy control of RENT, what do you think HLYW
will do? $50 million divided by 5.3 million shares to
control = tender offer of $10 per share. So, unless Ron
can manage to get the price of RENT up to that level
based on earnings, he'd face overwhelming pressure from
stockholders to sell.
Also, poison pill plans are
designed to make a take over more expensive, but can't
block a takeover unless enough new shares are issued to
give insiders an absolute majority. What I am
suggesting is that HLYW, faced with the untenable choice of
a $50 million settlement that threatens their
financial life, would be no ordinary hostile suitor, but
one who's survival is at stake.
Mind you, I
don't particularly advocate an HLYW buyout, but as a
stockholder, I'd certainly be considering ANY $10 buyout
offer, count on it. Might take a whole New York minute
Could be that the best defense
RENT can mount is to take actions which "enhance
shareholder value", to about $10 a share. Unfortunately,
there's one other action that could be taken, and that
would be to settle the HLYW lawsuit so cheaply that a
take over never becomes an issue.
your time in responding to these points , I appreciate
HLYW could settle out of court with RENT for
$25-$50 million. They could buy the company at $7/share
for $70 million. But then they would be in a position
of supplying their competition. Also, Ron can stop
them with the poison pill if he wishes. He would do
that unless the offer is so very high that
shareholders pressure him to sell.
There could be a buy
out coming, but it won't be from Hollywood.
I'm not trying to be antagonist
here, but I am trying to provoke some thought,
discussion, and research. Here's some questions for you and
anyone else reading:
What will HLYW do if it sees
a court loss coming?
Can HLYW really afford
to settle without bankrupting themselves?
RENT's poison pill plan really block a takeover? Does it
have the resources to fight? Are the stockholders
willing to fight, or will they tender their shares to
HLYW and get out?
Can Blockbuster block HLYW in
a hostile takeover, even if they don't like it?
Without the deep pockets of Viacom, will they really
commit their resources to a fight or just bow out? How
can they use the issue to cripple HLYW, their biggest
Doubtful that RENT management would sell
willingly, so let's assume for the sake of argument that
HLYW sees a court loss coming, don't want to pay out
$200+ million settlement, and gets a cold rebuff to the
suggestion of a buyout.
HLYW could then go to the
market and try, with outright buying or a tender offer,
to acquire the entire public float of 5.5 million
shares, which would give them about 53% control of the
company. They could pay as much as $30 per share and still
spend only $165 million. Then presumably they would
fire management and install their own
Advantages to Hollywood:
* They buy market share instead
of just losing the money.
* They could spin off
ComAlliance and other internet properties to recover a big
part of their investment.
* They wind up in a
strategically better position to contend with the meaner and
more nimble Blockbuster we can expect after the
spin-off (which prices tonight and presumably goes to
Does HLYW even HAVE the
resources to acquire RENT? Quick look suggests it would be
a reach for them. Their stock is WAY down, and a
poor currency for acquistion. Cash? They appear to
have less than $5 million, which they need for
continuing operations. But we're talking survival here, a
$200 payout would bankrupt them. They could borrow,
then float a secondary offering to pay for it. Willing
lenders? Who knows ...
RENT presumably would fight
back by loaning management the money to exercise all
options. (As the market price would be driven up,
presumably all options would be exercisable.) Would the
resultant dilution be enough to deny Hollywood a voting
majority? Additional "poison pill" strategy? What would
Disney want? They have a big option. So does Blockbuster
for that matter. Does Blockbuster have a right of
first refusal? Not sure about any of these question,
needs deeper analysis.
I'm no expert in mergers
& aqquisitions, these are merely my own
speculations. But interesting ...
One thing for sure:
The market price would be driven up considerably and
long-suffering stockholders would have a delightful exit.
Rentrak and Hollywood Set for Trial on January
PORTLAND, Ore., Aug. 9 /PRNewswire/ -- On
August 5, 1999, a Multnomah County Circuit Court judge
denied Hollywood Entertainment Corporation's (Nasdaq:
HLYW - news) motion for partial summary judgment on
certain of Rentrak's (Nasdaq: RENT - news) claims against
Hollywood. The Court found that a jury will decide whether
Hollywood is permitted under Rentrak's agreement with
Hollywood to lease videocassettes directly from movie
studios. The Court also denied Hollywood's motion to
dismiss Rentrak's case based on alleged spoilation of
evidence. Rentrak's conspiracy claim was dismissed with
leave to refile. The case is scheduled for jury trial
on January 10, 2000.