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Pacific Sunwear of California Inc. Message Board

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  • smaycs4 smaycs4 Nov 25, 2011 8:40 AM Flag

    Buyout or bankruptcy.

    I dont have a position here but are you sure they cant hang in there for the next 9-10 months ?

    If the economy improves and/or they can get some financing, this thing might have 2-5 bagger potential.

    Isnt that potential better than a $1.10 takeunder ?

    Also remember that the board & management dont own squat. So they might even prefer a bankruptcy, gets them a few more years on the payroll regardless of performance.

    So really, a merger doesnt help them as much as the other 2 options. I presume their employment contracts would guarantee their golden parachutes regardless.

    Im considering following Becker Drapkin into HOTT if it pulls back by year end.

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    • I think the business model is dead. If I were a shareholder, I'd rather have the bird in the hand. Hand the company over to private equity. I'm sure someone out there would like to try their hand at turning around this storied brand (seemingly the first one, perhaps, to ever enter this sector?)

      But sure, yeah, they could make it to next Xmas, perhaps. Balance sheet isn't horrible yet. It's just going down fast, with no turnaround in sight.

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