Just wanted to get an idea of what those who are still holding SOAP think will happen with the stock. I was long SOAP for long-term reasons, but after the MS hiring my original thesis is changed. I'm trying to decide if I should hold or not.
Ideally, I would like to hear the company is issuing a $3/share dividend. That would basically pay for the current stock and leave about $45M for the co. to invest in developing the PNC. After a dividend like that, the downside on this investment is truly 0, while the upside of PNC success is significantly greater.
I know there are those on this board who disagree and I welcome those disagreements. I am trying to gauge what others are expecting so I can temper my expectations as a result.
Get over the idea about the prospects for this "super" product. If activist shareholders are called "predatory" by a later poster, then I guess that should be a good word then to force mngt to do something for the real holders of the company and not wishful thinkers. With the stock drifting down from the recovery high, remaining holders of course are discouraged what the ultimate outcome might be but if the right thing is done, the ultimate amount that shareholders receive should be more than this current price that has been determined by the worst stock mkt in most of our lifetimes. Just my humble opinion of course. The key of course is "Is the right thing done for shareholders of course".
Morning, Riley! Glad to see I struck a nerve. I've been trying to figure out why you're on the 'quick buck' side of this stock and I think I now know (at least part of it).
You've mixed some metaphors, but by saying, "...the real holders of the company..." I think you mean "The real OWNERS of the company." Is that true? If so, you're mistaken or misled.
First, you own a stock; simply a piece of paper. The real owners are the officers and MAJORITY shareholders. If you don't own a majority of shares you can control a PLURALITY that gives you greater decision-making power but brings you no closer to ownership. (That's what 'activist investors' do. They control a voting block and attempt to force the owners to give more money to share holders.)
OWNERS try to build a company. They trim costs and hoard cash because they know that tough times are coming. Owners make long flights to meet with 10 times more potential customers than will ever be actual customers. Owners act in the best long term interests of the company. If the OWNERS of AVICI had been any less competent there would not be $100M in the bank. (It may sound odd to contrarians and ticker watchers but AVICI put that money in the bank ON PURPOSE. They could have stolen it a long time ago but, since they are competent owners with a vision they decided to build something bigger...SOAP.)
Riley, don't hack on me because I have a vision for SOAP. I called activist investors 'predators' because they historically eat whatever they come into contact with. The term was not derogatory, it was descriptive. (OK...the 'penile' part was derogatory. Please accept my apology.)
Good luck. Pray that reason prevails and we all get what we want. Howard
Like Howard, a was disappointed by the Morgan Stanley engagement and I attribute it to pressure from one or more "activist" shareholders who hold a substantial stake in SOAP. The press release more or less implied that this was the case. These activist shareholders appear to be seeking a quick short-term pop in the share price.
With regard to the proposal of a $3 dividend presented at the beginning of this thread, the issuance of such a dividend would be a big mistake in my opinion. The company needs to have plenty of cash on hand, for two reasons: (a) to ensure adequate funding for product development, and (b) to give potential customers a strong level of comfort regarding Soapstone's viability as a going concern. If a potential customer begins to fear that Soapstone will go out of business, that potential customer will probably shy away from becoming a real customer. I've seen this sort of thing before, and it can turn into a vicious circle that can quickly kill a small company.
Without a hint of humor I believe MS gives us a dollar a share, takes a dollar a share, and everyone goes home feeling hungry (especially activist investors).
In the vast universe of stocks/equities, bonds, ETFs, real estate, and your Uncle Joe's pig farm there is an almost infinite variety of places to put your money and hope it grows. An activist investor in this environment would seem to be either predatory or penile.
No one gets satisfied in this deal except bankers and lawyers. Good luck, Howard
I think you hit the nail on the head with regard to investing money at the moment. Soapstone is investing its money in a new product that has a decent shot at becoming a winner. Having a winning product will eventually benefit shareholders in a big way. By contrast, simply giving a couple of bucks to shareholders at this point would be a shameful waste of money that could be much better invested in R&D and marketing.
While I can't predict with certainty that PNC will be a winner, at this point my definition of "winner" is pretty modest. $60 million per year in sales could, according to my simple model, produce GAAP EPS in excess of $0.50. Perhaps as high as $0.70.