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Sport Chalet Inc. Message Board

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  • mmsa262 mmsa262 Sep 12, 2006 4:15 PM Flag

    This Seems Cheap

    I think the reason behind the stocks relatively low price to value lies in the fact that 1. It is thinly traded and 2. The structure of the shareholder ownership.

    SPCH is basically an insider controlled company where a minority interest is owned by a diverse group of outsiders. It is a prime takeover/merger candidate, but any takeover or other such unlocking of equity value will have to be done under the terms and timing of the current management team. SPCH is a real long term investment where I am convinced the truly patient will be rewarded.

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    • If one could get a handle on how much more stock mngt has to sell, that would be the key. I always assumed that the reason they had to sell so much was because of the reorganization and tax liability that went along with it. Any discussion on that subject would be appreciated.

      • 1 Reply to rileywkr
      • Don't quote me on this, but I will take a stab at your question. Olbertz (the founder) had owned about 70% of the outstanding stock before he split the company into A and B shares (which I don't understand exactly why he did this) and essentially gifted a chunk (maybe 40-50%?) to a couple of key execs. This dilutes the ownership among more people, but they are all insiders. Wedbush Morgan (sp?) an investment company/brokerage owns about 5%+ which I assume they acquired on the open market. Exactly what percent of the company is owned by whom I don't know.

        No question, someone is selling and someone is buying the A shares in a big way over the last couple of weeks. Who is doing it and what it means I don't know. This board is so relatively inactive that I have a hard time finding out what is going on.

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