My investment banking kid says that without a break in the market, CVG should be in the low to mid 20's 6 months after the spin off. Says that they are making all the right moves, but also says they could have a negative profit blip as they account for certain consolidation costs. Overall he's bullish.
On CSN, he says that he see's upper teens in 6 months, depending on how aggressive CSN management refocuses their attention. A buy out of CSN could be a possibility with CVG on it's own. He's a punk, but he got me into CVG at $12 and CSN at 27 (avg) two months ago, so I'm listening.
I was both "pleased and relieved" to see that the company finally decided on announcing the spin-off date and the ratio that each shareholder would get from their "unsolicited and unconsulted decision." While I personally believe that "each shareholder" has received about 2/3 in value what they are entitled to, it is a lot better than the "alleged 1/10 of one share that some people on this board were willing to accept at the time the spin-off was announced."
I appreciate your willingness to share an opinion but lets stick to the facts with this company, not opinion. For example the CVG people should not have any "consolidation costs" period. If they do then they have a "real problem." All the assets CVG has,ultimately came from your owning CSN. They were both one and the same. CSN bought all the buildings, equipment, paid salaries, and hired people with "your money." From August to December 1998, they have had the "play or use of your money" and you need to know that. In addition, they received IPO funding totaling many millions of dollars. To calculate that look at the total number of shares sold and use an average price for the period and you can come reasonably close to the "real truth." The original IPO price for this stock had to be lowered because the managers chose an "innopurtune" time to announce the IPO, which has lowered it value. I believe the IPO price was from 5 to 7 dollars lower than the initial target and CVG has shown very little increase in value because I believe and sense it has weak management. I hope I am wrong, I will wait awhile and not make a "snap decsion" but I know that the CEO of CVG sold a large amount of CSN close to $2M in options. (You can verify this by going to the EDGAR data base) This ought to "make you think a little" about judgement."
The next thing you might want to consider is what would the whole shooting match be worth if you had : (1) phone company, (2) CBIS, (3) MATRIXX Marketing, (4) Cincinnati Bell Wireless, and (5) satellite TV. Probabaly a lot more than the current 29 and 16. It might be a 60 to 70 dollar stock. The reason for the break-up according to management was Wall Street did not know how to value a phone company and the communications/billing services. So how can it now value CSN with the wireless and the satellite. Somehow, it will and I believe the value will be very high mid 30's to low 40's soon. Which leads me to only one conclusion, if you can spin-off CSN 1 for 1 with a share of CVG, how is it that Wall Street could not do it. I believe that was a "cover story" to get executive compensation for 2 CEO's and boards which dillutes the value of both CVG and CSN. CVG accounted for 75% of the revenues of CSN, despite its "weak managers" who have been overcompensated and have "unjustly enriched themselves" at your expense. Buy something like E-BAY or AOL I did and you might feel better.