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Publicis Groupe SA Message Board

  • sambordulac sambordulac Jul 1, 2007 9:57 AM Flag

    Iwant, RCG (ot)

    Greetings, Mr. Iwant,

    I came across RCG by going back to my pink list, a collection of all sorts of oddities. I noticed that RCG's symbol changed and decided to look further. Here are what little I found:
    RCG's a closed end fund.
    RCG's book as of 1Q07 was $10.92.
    The CEO, Mr. Cleveland, recently bought 13888 shares under $10. He actually makes his money through the management company he controls. The management fee is mighty high, something like close to 5%.

    So, I ask myself, why on earth would he buy the shares when he got only 10, 15% discount, even though in insignificant amount? Maybe one or more investees may perk up soon?

    You know I am not fond of high fees. I am more curious than interested in the shares.

    Best, Sam

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    • Mr. Cleveland recently published a book where he recommends investing with "entrenpenurial ceos" that own significant shares of stock in their own companies.

      My guess is Mr. Cleveland has been buying more shares of RCG so he can look in the mirror and see himself as an entrepenurial CEO. But the main problem with RCG is the 3% management fee. Mr. Cleveland could do much more for his shareholders by cutting his management fee in half.

      • 1 Reply to catlover322
      • Greetings, Mr. Iwant and Ms. Catlover.

        Iwant, great call on UNAM.

        Thank you for the note re: RCG. Didn't think it attractive but went ahead on the exercise since I own some RAND and thought to broaden my sight in the field. Mr. Cleveland did not have consistent record.

        Also from the rubbles I found one WXCP.PK. WXCP is the old Wheeling-Pittsburg that spinned off the steel mills a few years back. It now mainly own Handy & Harman. Among other things, H&H makes tubings. WXCP was practically broke and got to make a large acquisition recently with the backing of Steel Partners, its 50.3% owner. I expect some sort of turn around but WXCP is not safe. I'd rather be in Steel Partners' position. The acquisition is puzzling.

        I am expecting RGFC to pop in a few months. It should have the accounting issues out of the way before long. The sales of Crown Bank in 4Q also should help.

        Best regards, Sam

    • Okay, it appeared that RENN, the management company made the purchase. Before that, for many years, it maintained its 8.3% share ownership, even through several years' failure to make SEC reports. The returns were better the past few years, but not spectacular, and were lumpy. It's hard to see its future. Unless I find better discount or some compelling reasons, I'd pass.

 
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