CVC controls 3 out of 5 board seats and with the liquidation preference own everything. CVC is a private equity shop, they will have Lonnie turn the ship around and then sell it and take everything.
If someone else understands things differently please explain it now...
Again I want this stock to go up as much as the rest of you and unfortunately I'm already committed.
Unfortunately I think you are being far too optimistic. I hope it gets to $0.50 but if I was new money I would never buy into this stock with the liquidation option. Maybe that's just me, but that's how I see things.
I agree with the $.50 call. I won't sell below. And ironically, higher prices may beget higher prices, as it creates less incentive for CVC to sell the company for a song. But if the pps stagnates around $.20 for longer than a year, then the risk of liquidation becomes real. I have no clue who would buy them though.
Not so much!
CVC gets paid on NAV
NAV has been ZERO
Due to it now being equity they can Mark to Market.
If the equity continues to grow,NAV moves up.
They never need to sell,They just need TALN to grow.
I use to look at 3 and 5 yr plans and as long as it was up,I got paid.I would even add to a position for aquisition if it would provide a stimulas to NAV.
We can beat this to death,Bottom line is a win win.
Buy ,sell or sit and watch
My call is .50+ by next qtr report.
Rule of thumb is each double gets easier.
If CVC starts to convert some of their Series B into common shares, it would alleviate some of the uncertainty about a liquidation event. Something to watch for.
Lonnie and Larry protected their upside and ours and by the way CVCs
I do have a guy you should meet,He is on this board,Calls himself Label something
and always pass and move on,if you can not get comfortable
Exactly Schnell and Dyne covered their backs. If their is a transaction they get paid, if not they get paid. Unfortunately that's not true for the rest of us.
Whenever minority shareholders no longer have any control its difficult for a stock to appreciate. Why would someone invest in TALN if they COULD lose everything with a liquidating transaction? You can play with scenarios where it would work out fine for minority shareholders, but the bottom line is the overhang, and stock prices are hard pressed to go up when there is an overhang like this.
CVC owns the company now, thats the bottom line.
"...It really boils down to what CVC wants. Do they want to get this thing cash flowing and sell it or are they a long term shareholder that eventually intends to sell in the open market."
It seems to me that there may not be that big a difference either way. If they intend to attract any bidders at all, they can't afford to let the business go to pot. So CVC's interests are aligned with the common shareholder - both short-term and long-term.
Here's an example: Let's say CVC has designs to sell the company someday at a modest target of $50 million.
There is a range of possibilites between two extremes:
1) CVC converted ALL their Series B preferred shares into common shares prior to a sale. Then we're looking at a stock price of $0.64/share, because the fully diluted count would be around 78 million shares.
2) CVC converted NONE of their Series B preferred, meaning they forfeit the conversion into 41 million common shares, and instead receive the liquidation preference.
If the sale takes place in one year, the liquidation preference for CVC is $19.4 million, and shareholders get taken out for $50-19.4 = $30.6 million, allocated over 37M shares. Or a share price of $0.82.
If the sale takes place in two years, the liquidation preference for CVC is $22.5 million, and shareholders get taken out for $50-22.5 = $27.5 million, allocated over 37M shares. Or a share price of $0.74.
If the sale takes place in three years, the liquidation preference for CVC is $26 million, and shareholders get taken out for $50-26 = $24 million, allocated over 37M shares. Or a share price of $0.65.
My theory is that if this company isn't sold within 3 years, it will never be sold. Either because the business turned south, or CVC decided to keep it in their equity portfolio due to out-performance. And by my calculations, selling within 3 years only helps the common shareholder provided the sale price is at least $40 million. Would they sell for less than one unit p/s? And screw Lonnie out of his retirement equity? Hmm..... read on.
Reading the 8-K that was filed for the recapitalization agreement on 8/5/10, I noticed that Schnell and Dyne each get awarded between 5% and 10% of the proceeds on sale of the company (comes out of CVC's pocket). So Schnell and Dyne have insurance in case your apocolypse scenario plays out in 10 years and the common shareholder is wiped out due to inflated liquidation preference. I would like to have this same deal myself.
"...CVC agreed with Messrs. Schnell and Dyne that in connection with a Triggering Transaction, CVC, and any other holder of Series B Shares and shares of common stock acquired upon conversion thereof, shall pay to each of Messrs. Schnell and Dyne a portion (beginning at 5% each and increasing to 10% each) of the sales proceeds payable in the Triggering Transaction to CVC"
The screw train has left the building.
They have been offered the keys and decided to pass.
The Lonnie and Larry show(and the guy who sounds like aaron todd-cfo?)Has proven the real money is in the future and CVC has boarded that train.
As what his name(cfo?)stated 1.7 million has not been reach in 7yrs
CK your charts and see where this company was by marketcap 7yrs ago and divide by 60 or even 80 million shares.
I will stay on this train.
By the way Aaron Todd was the CFO of AIRM back when it was a couple of bucks and is now the CEO at 30+
Good luck -whats your name-oh ya he bought at 5-7 cents(insider buy list)
When we meet, you buy lunch and I will remember your name.
That makes sense. It really boils down to what CVC wants. Do they want to get this thing cash flowing and sell it or are they a long term shareholder that eventually intends to sell in the open market.
It will be tough for this stock to fly if its not clear what CVC's real intentions are. My point is they can screw the minority shareholders if it suits them, and potential investors don't like that.