He has been dumping money into CLRS shares over the last 18+ months, especially after it dropped below $6.00. He has been waiting for the market to correct, it did and now they are ready to pounce on the next great opportunity.
Just my take, but in hindsight, they have been waiting in the weeds. Looks like it was a good decision.
BUT....now they need to pull the trigger. Keep the line of communication open and we all appreciate the reduced salaries.
Roll up is possible and likely...If you listened to the call this past summer, he stated that he would use maybe 2.5-3x turns of leverage.
CLRS will find other sources of cash without breaking NOL laws. CLRS has had years to think about how to structure this without losing the NOLs.
Read the NOL tax law. You can't just "roll up a few companies" he will need to pay cash if too much ownership changes hands we lose almost all NOLs. Once you get 4-5 turns of leverage on one business it will be very difficult to get financing to acquire another business. The only cash abailable to spend would be the earnings the first company generates after paying off the interest. Please correct me if I am seeing this wrong.
"What shareprice did you expect when you calculated the risk/reward here, those years ago?"
I have stated previously that I am a newer shareholder. My cost basis is in the low $4's--I would probably not have been interested at $6. Initially at the low $4's, it was trading significantly below net cash, so I viewed risk as being incredibly slim and reward as being fairly certain due to a narrowing of the spread between market cap and net cash.
In the meantime, I have made around 15% as the spread has closed between market cap and net cash and everything from here is gravy for me. Yes, I do realize that return has lagged the overall market, but I do not care about a 6 month-one year return.
Once a deal is done, I expect that Clarus will have a value significantly greater than the current share price. I sure wish that I had control over a company with such positive attributes pre-acquisition.
I am thinking about this differently than some others because I got in at a nice price (almost at the bottom) and am perfectly content with sitting here.
In two years, if we are lingering here, feel free to call me an idiot. I just don't believe that we will be.
I am enthused to see discussion on this board and welcome thoughts and criticism from folks who have been investors here for awhile.
"When he does, I believe that anyone who bought stock within the past few years should realize a nice return on their capital as well". Okay, I certainly buy that ambition from a long standpoint. But let's define "nice" a little better. What shareprice did you expect when you calculated the risk/reward here, those years ago? If you bought in at $6 (book) would it have been $10? $20? $30? $100? How has that worked out for you, plugging in lost opportunity in your risk reward scenario so far? It seems to me you may now be looking to make small money on this because you gambled on the NOL's paying off like a slot machine. I look at this as a minimum $20 a share to justify the story stock that this really is. Do you really expect that to happen? No desire to argue either, but this is an investment message board which comes down to sharing strategy it seems to me. What shareprice are you going to be thrilled with? Oh, by the way, the principals have been paid pretty well. Have you been paid? Just my humble opinion.