These are companies that are similar numberwise (low Price Sales, low forward PE, some earnings growth, low market cap) to PTSX that you all might want to check out:
PPK CMKG MSEL
Please it is not about Haig it is about the few people that are still at this company that have held it together. Controlling costs and shrinking revenue is not magic. Understanding the business and the employees is the true sign of leadership. There aren't many of the good guys left.
Say what you will about Luke but he understood the business and knew about service, quality and speed. Things may have gotten away from him but he was not alone. Look at all of the other internet/service companies that have disappeared.
Buying a business in Canada is not a good move. It is another country - in case you forgot check out how they are backing us up where it really counts. There are lots of skiled employees in California - it is ludicrous to claim otherwise.
Don't forget about the folks that really make it happen - they are more important than anyone else!
With the War In Iraq starting this Tuesday and ending some time at the end of the week, it is now time to change the name of Point360. Haig needs to put his OWN stamp on this company to get it to the next level. At least Dubs Inc., MultiMedia and AllPost had INDUSTRY names. It's time to brand this company in Haig's image. Not some surfer dude's.
As for production coming back to LA, it won't for a long time due to a couple of things you all have forgotten. First, California is bankrupt! Taxes must go up uP UP *UP*! That will include all manner of taxes on film/video production in LA. City of LA is also broke so expect those taxes to go up too. Canada can always give more tax breaks to productions to keep them there, if the USA tax increases coming to pay for Iraq don't cover the Loonie><Dollar exchange rate change. Then you must consider energy prices. Gov. Davis is still cutting checks to Enron and Duke for the electricty and natural gas he foolishly bought a couple of years ago. He's also mandated a different much more expensive gasoline formula so we are $0.35 a gal more that the rest of the USA! Sucks here :(
Second, production has been gone from this Union city for so long many IATSE union members have been out of work so long they have switched carrers and moved out of the area. If production were to come back there would be a serious shortage of trained labor to work on it if it came back all at once. Heck look at what they are shooting stateside - Reality TV and game shows! [Does not require lots of specialized people]
No guys, production left Hollywood and did so for good.
Now, porno production is screaming in the SFV but that is a different subject.
Thanks for the tip CPA, think I'll buy some loonies.
CPA: No news or opinion on PTSX from me.
'ya all have fun
> >must agree completely re cpa's comments re canadaian currency. looks way undervalued compared to dollar, as most other currencies did a year ago. other currencies (euro,etc.) have moved up vs buck much more than loonie has. further loonie strength will be make canada less competititive in lots of export markets, including films.
> >also agree that it is much more important to pay down debt and make sure current operations are running well before even considering any acquisition, whether its in canada or not. not only should balance sheet be improved, adding another operations with attendant necessity of management attention (drawing it away from current operations) sounds like bad idea to me. valuation here certainly looks cheap and i like what new guy is doing, but canadian acquisition baffles me.
must agree completely re cpa's comments re canadaian currency. looks way undervalued compared to dollar, as most other currencies did a year ago. other currencies (euro,etc.) have moved up vs buck much more than loonie has. further loonie strength will be make canada less competititive in lots of export markets, including films.
also agree that it is much more important to pay down debt and make sure current operations are running well before even considering any acquisition, whether its in canada or not. not only should balance sheet be improved, adding another operations with attendant necessity of management attention (drawing it away from current operations) sounds like bad idea to me. valuation here certainly looks cheap and i like what new guy is doing, but canadian acquisition baffles me.
If you assert that all the work there is done for US productions, it would seem that the acquisition would be just plain dumb at this moment. But you still haven't addressed the other side of the equation regarding present and future Canadian based revenues?.
About the options, granted, there are no guarantees for the future. However at the time of payment, any seller wants to have some basic idea of how he's getting paid, the value of the payment, etc. The seller must base is receipt of payment on some accepted basis to him. Generally, transactions are measured by some perimeters and expectations at that time. Anything can always happen later. I'm really looking at ideas here of what the sellers are seeing in their side of the transaction. For all I know, they may have been promised the moon. But that's not the point.
Currency - Impact - Yes, currency values have a material impact on US companies decisions for filming. If a strong dollar dictates that you can film in New Zealand for $70 Million or the US for $85 Million, where are you going to film? Currency fluctuations do have this degree of impact on these decisions. We are headed into a long period of strength of the Canadian Dollar in relation to the US Dollar. The filming business in Canada is poised to fall off the end of a table.
Options - Material Variable? No. Every public company has issued options. Does it therefore follow that every companys' stock price will be higher 12 months out as a result of the strike prices and vesting of options? No.
Let's talk about that too.
Is it also your assertion that they don't process any Canadian based work?. It is my understanding that Canadian based productions are also on the increase and it is a growing local industry anyhow. Will changes in currency value really have the material adverse affect which you expect?.
On another point, if the options granted at $2 are an important financially material variable to the reasonable calculations and expected price at the time of acquisition and the intermediate future thereafter, say 1 year or so, as sellers, I would think they looking to some payoff within a reasonable time, if not in cash, at least in asset value reflected in stock price. Do any of you have any ideas about this?.
The Canadian economy is overwhelmingly based on commodities. Commodities are screaming. China is sucking in commodities from around the world and will continue to do so for decades into the future. The Canadian economy is therefore poised to way outperform the US economy. The Canadian dollar will strengthen to the point that it will soon be 30 to 50% more expensive to film in Canada than in the US.
Money talks. Bull
This Canadian acquisition is a bonehead move that Luke would do. Haig should be smarter than this. Much smarter. Shame on Haig for carrying on the Luke tradition.