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SED International Holdings, Inc. Message Board

  • barryobummer12 barryobummer12 Feb 5, 2013 10:38 PM Flag

    value destruction is clear

    I think the recent 13D filed by Gad clearly lays out the mismanagement that has occurred. And it's obvious that the largest incentive is for the board to collect big fees, regardless of the stock price. 3 fewer members than 2009, and yet they earn more than the previous 7 combined. They run a company with a $12.7million market cap, and pay themselves like they're 10-100x larger. To add to that:
    Bought back shares at higher prices
    Issued stock to the board at lower prices
    depleted cash by 50%, inventories bloated by 25% since 2010, and sales aren't much higher

    They'll never achieve 1% net margins the way things are going. Plus it seems like SED is the part-time gig while North & Webster is the full-time gig. Like locusts, when one field is devoured, move on to the next. Does any evidence exist to the contrary? I hope Gad is successful in seeking change, since the smaller shareholders among us can't do anything but take our lumps and move on. Bobbyred? gak2000? What do you think?

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    • Fellar, the quarter is pert near over. Am still thinkin' a loss in this quarter, maybe -10 cents/share. Am thinkin' I might be able to get back in under $2 in late May. Reckon we'll c. Best a luck to you.

    • It seems like crooks all around - the board makes more on compensation than share appreciation. Buying yourself a board seat ala Kidston is a very good investment. On the other hand, Phillips-Exeter educated Kidston totally outclassed Gad. He knows how to play the game, but still, they're both rent-seekers, Kidston just happens to be better at it.

    • I have a different feeling about the situation.
      I don't think Gad is a white knight but just saw a good opportunity. Not for stock price appreciation but for a fair return on a $1M investment he would get a decent return just on director's compensation. Yes, very cynical but a sad reality if true.
      I can not believe he has anything to offer being on the Board especially if he and his legal people did not understand the requirements of being on the Board either by the company itself or SEC requirements.
      Now management is asking other large shareholders if they would like to nominate Board members so that they too can suck on the company's largess to it's members.
      I just wish the SEC would have a regulation as to Board compensation that is the greatest deterent to this company's viability.

      • 2 Replies to gak20002000
      • gak20002000, fellar I understand what you are sayin' but perhaps, just perhaps iffen Gad and anothern director (requested by Gad) would get on the board and suspend compensation and options for one year until SED gets back on its feet, well that would give the stock a boost. I reckon one a my questions is why would Kidston (who owns 10% a the stock) and othern directors (who own pert near 1% or more) pursue policies that cause the stock price to go down? Don't they get it as Kudlow would say "profits are the mother's milk to stock prices". Perhaps the board jest dont get it? Why is sam hell does the board pay themselves big salaries and options fer POOR PERFORMANCE?????? Don't they want to see thar shares appreciate in value? Don't they want to see the compny succeed?

      • I agree with a lot of your points, but not the incentive for Gad. PGNT letters state that PGNT is Gads largest holding, and PGNT owns 18% or so of SED, so the money made by having the stock prices of both go up would be far more meaningful.

    • obummerfellar, I agree with what you are a sayin' here. My wildassguess fer the quarter remains a loss a pert near 20 cents/share and probly pert near a reduction in revnue a $20 million or so. Seems the only thing the board has adapted to is the higher perks and compensation, not adaptin' to the change in tech preferences by consumers and the biz community (large purchasers). I reckon Kidston will find out the hard way when shares resume thar downward trend because the board is suckin' all the profits away and issuin' themselves more stock options. I am lookin' to re-enter in the $1.75 to $2.00 area say around the middle a May cause I suspect a loss fer the past quarter when announcered on Feb. 13 and anothern loss to report in May fer the current quarter. Kidston & Company better get thar act together or thar stock will continue to be worth less and less. Maybe Gad-Paragon is the WHITE KNIGHT that shareholders and employees need to save the compny from it's board??????? Jest my 2 cents worth, but somthin' gotter change in a hurry or the stock keeps headin' south. I wouldn't touch it right now.