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Joe's Jeans Inc. Message Board

  • cheating_stock_invester cheating_stock_invester Feb 21, 2013 3:53 AM Flag

    will JD sellout for a takeunder?

    assuming the acquiring company offers him shares but the acquiring company has much more scale and potential than Joes standalone? i did some math and factor that Joes is fully priced for a takeout at today's trading price 10-15% max premium, but it will have to be majority stock swap with around 15-20mm cash. Nobody in the industry will fork out $100mm cash at this time on small returns since joe's standalone is not making any significant profits, over 5mm a year with 110-120mm sales. Stocks are high now so paying with stock is a good thing.

    so i go figure, a takeout price based on today's performance will value the company approx 90-110mm give or take. it could be the price was already factored at 1.20 when it was trading at .85 cents in dec, but now the stock ran up, it could be a slight take under or max 10-15% premium to today's stock prices.

    the good thing is if we get stock in the acquiring company, it gives more long term investment to be excited about in a much better long term and viable company.

    take a look at Parlux was bought by PERF several years back, they paid all in stock, and PERF ended up owning PARL line of fragrances. I can see another similar play coming on this sooner than later. If it pulls back significantly I would say it is a good time to buy.

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