Press Release Source: Arcadia Capital Advisors, LLC On Thursday July 28, 2011, 7:00 am EDT
NEW YORK, July 28, 2011 (GLOBE NEWSWIRE) -- Arcadia Capital Advisors, LLC ("Arcadia"), through its Managing Director, Richard S. Rofe ("Rofe"), has sent an open letter to the shareholders of Ballantyne Strong, Inc. ("Ballantyne," "BTN," or the "Company") (AMEX:BTN - News), urging the Board of Directors (the "Board") to actively buy back shares under the current $1.0 million share repurchase program. The letter also requested that the management team of Ballantyne ("Management") and Board expand the program by an additional $3.0 million, allocating a total of $4.0 million for the share buyback program.
"Arcadia's recommendations here are in no way a departure from a course charted, but not yet traveled, by the Company," stated Rofe. "The Company's stock is down since the end of the first quarter despite the positive efforts and results posted by Management. A buyback would provide some price support for a stock that has seen continuous selling."
"It is Arcadia's position that the Company is significantly undervalued and that a share buyback would improve investors' overall perception of BTN's equity value," Rofe explained. "The shares are trading close to 1x tangible book value, despite their new product offerings and the tremendous growth opportunity in China. In our opinion, the renewed commitment to the repurchase program would help reduce the discount currently applied to the relative value of BTN's stock by the market, and demonstrate the Board's confidence in the Company's ability to execute its business plan."
"We believe this measure would also build a positive relationship with a patient but suffering shareholder base that has seen its investment fall drastically since a new CEO was introduced in November 2010," Rofe continued. "The buyback program could allow the Company to materially reduce its number of outstanding shares, thereby generating long term shareholder value in a tax efficient manner."
"Management and Board must be guided by responsibility to the Company's shareholders," concluded Rofe. "We do not see a better time to expand and execute the share buyback than now, when the stock is trading at a discount to peers and close to book value."
Click the attached link for the letter:
<... it's purely supposition on my part but IMO, CIDM is management's target..... from the little I can see, it's an old joke but CIDM might be a better buy for International Paper...... for the dead wood. JMO.....>
No way on CIDM. They are struggling with their cash flow every quarter secondary to a quarter Billion debt racked up with their phase I and phase II installs. There is something going on over there as they started chopping up the company and selling profitable revenue streams on terms that are not disclosed. Their content delivery system appears to be their prime directive but they're still losing like $7 million per quarter - which is about equal to their debt service. Content delivery cannot cover enough to allow them to hit profitability before they run out of cash, credit or a market for their shares.
Their content delivery system has a lot of potential - but will be owned eventually by someone else - and I don't think BTN is the customer to buy it. Wouldn't mind seeing that happen if the price was right - but would be worth more to someone other than BTN. All IMHO of course.
ranni..... I have no way of knowing, nor any insider input, but BTN's press releases seem inordinately favorable to Cinedigm..... it's purely supposition on my part but IMO, CIDM is management's target..... from the little I can see, it's an old joke but CIDM might be a better buy for International Paper...... for the dead wood. JMO...... I'm more against BTN making ANY significant acquisition at this time.
I agree 100%.
Going “acquisition mode” is recipe of disaster. Even they would pay that with cash, acquisition should be always weighted against buybacks, their deeply discounted stock. Almost impossible create more shareholder value than buybacks. That said, i think their business model is not that strong yet, some kind of diversification could be helpful.
It remains to be seen, can they pull out some kind of "strategic" acquisition with right price. I’m happy that my money is not on the table, better to watch from the sidelines.
ranni...... I looked also and didn't see any listing of Arcadia holding BTN shares..... Like you, I was hoping Arcadia had taken a large position because they worked relentlessly to enhance shareholder value in CPEX Pharmaceuticals, which was another dog I walked a few years ago..... in the case of CPEX, Arcadia "worked with management" and basically wore a bloated, unresponsive management down over a couple years..... CPEX was eventually sold off profitably for all shareholders. I can only ultimately hope for a similar outcome for BTN.....
The tone of the last quarterly call was that BTN was going to pursue acquisition(s).... IMO that is an failed growth strategy from the 80's that I've been through far too many times and don't care to repeat. From my own experience, acquisitions typically result in large bonuses for upper management and the Board, on top of an overpayment for the acquired company..... remaining shareholders are left standing at the curb with losses from dilution and an even lower share price followed by several more years to recoup their investment. Managements offset effects of dilution through an expansion of their bonuses.
I'll be particularly distraught if BTN's Board chooses to support an acquisition action of any type during the next couple years when, IMO, the economy is going to remain very soft.... the Board did hire this CEO and his ideas and they are supporting him..... my opinion is the Board hired the wrong CEO for this particular point in time and they're headed in the wrong direction. Hopefully, the Board will take a conservative view of things for the foreseeable future and will focus on increasing the stock price of the existing company. JMO
The major problem with this suggestion is that their cash position is "most likely" a lie ... if they had the cash, they should have been buying weeks ago ... no press ... no shareprice support ... no insider buying ... no buybacks ... seem very obvious to me!
bluesky..... not sure I'd go so far to say BTN doesn't have the cash but I suppose in theory you could be correct. I guess we'll see in a couple weeks when earnings are reported.
The share action certainly is expecting the worst..... it could go either way and only time will tell.