The news today is very encouraging. It's the type of restructuring that is substantial and changes their business model in a way that should allow for high profitability if the can get revenues to come back. I'm impressed the Board and new CEO made this move so quickly. I think this is the end of the bad news and CAW will do well in the next year.
I understand the sentiment is pretty negative on this board. I understand why- however, my view is that buying in the $1.80 range offers a compelling risk/reward.
The results from the quarter last week were terrible. Now we know why they fired the CEO. He loaded up on inventory and prices were soft- thus, margins were bad. I find it encouraging that the company made a in management when it became clear he wasn't the guy.
Housing starts will continue strong and the renovation market is picking up. Structural margins will improve from here- I think you've seen the worst things are going to get and all the negatives are priced in now.
In the next few months, they will announce a quality CEO and results will pick up. All just my opinion.
It's a positive move as long as they didn't spend too much cash on it. Many people have left this company for dead and I think they will be proven wrong. They over built stores in NYC when they should have been doing smaller mall-based stores. They know this and have been making the adjustment. This company is early in its evolution and they will have to make many adjustments to get the formula correct. I think they will. And I think the stock is worth much more than where it is trading as long as the deal closes that raises the $10 million. If it does, we'll head back over $2. If not, we're in trouble. They need the capital.
I think you should continue making investment decisions based on some wall street journal article. That author probably has made a lot of money as an investor. They must be right.
The stock was around $2.50 when the recent capital raise was being contemplated. In reading the agreement, if looks like a drop in the stock price does not constitute a material adverse change. If that's right, then the stock should go up from here if the deal gets done. If the new investor walks away... CRMB is in trouble. I think it's a good risk/reward from here- they got over saturated in NYC and that is hurting them. I'm buying here.
This whole thing needs to be investigated. Within a couple weeks, they can't get the earnings out, announce going dark and then now want to buy the cmopany after the stock gets killed? Something isn't right.
Very bad Q1. It's time to let SB manage the portfolio and reduce the dividend. Business is bad and it's been a long time since they have come up with new, successful products.
Is it your understanding that they have to distribute the cash since they are a REIT? Or could they do a tender (stock buyback), or use the funds to acquire another property?
joev, your idea kind of makes sense as long as the underlying MLNK business shows some stabilization. You'd hate to put a good business like HNH into a company losing money.
Bobo, Steel couldn't legally increase their holdings by buying in the open market. They were prohibited by the limitations MLNK put in place in order to preserve their NOL. MLNK also needed cash, which they would not have received had Steel bought shares in the open market rather than from the company. Steel paid a premium to the market price in order to gain control of the company, which they effectively got by having WL the Chairman and 2 Board seats. The stock didn't go up because, in spite of Steel buying in, it's still the same sh1tty business. The business needs to show a turnaround. So, contacting the SEC will only create a chuckle from them on what a knucklehead you are.
If he continues making good capital allocation decisions (like buying 20% of CBRL) and SNS performs like he has promised, people will love him one day.
This company didn't innovate and stay with the current trends. Watch that video from last year's annual meeting. The speakers voice and the furniture design make the video seem like one they dusted off from the 1980's. Everything passed this company by- moving production to low cost countries, update the product line to stay current with changing trends, reducing costs, I could go on and on. They've always been a lower tier operator in their space and just couldn't keep up. They need some people on the management team with a more youthful and modern product style and management style.
speaking of chinese, CRC is the last remaining furniture manufacturer in North American. And they can't turn a profit. What does that tell you? All the others were smart enough to figure out you can make furniture cheaper overseas. They are going to keep building their high cost furniture in N America until they run out of money. Which may not be long.
Another asset sale announced last night: $3 million
Last month they sold an asset for $24.4 million
That's $27.4 million in sales
In addition, they had $2 million cash on the books, $2 million in marketable securities
That gets you to $31.4 million.
They also have a $3.6 million private equity portfolio.
Now you're at $35/share. and most of that in cash.
In addition, there are a few other smaller assets and another $2.5 million investment in affiliate.
Subtract out some taxes on the Grove Isle sale and you are still well north of $30/share.
Based on my math, HMG has over $25 per share in cash and investments. The vast majority of that is cash- and that is after estimating the tax liability from the recent sale. Add to that the net value of Monty's restaurant and Marina and you get well north of $30 per share.
Anyone else have an opinion?
because he wanted control of the company, which he has now. He paid a premium to the current market in order to obtain Board seats and the Chairman role. He now controls the company, which he wouldn't have had if he bought in the open market. Also, as someone else pointed out, he was prohibited from buying more in the open market due to the shareholders rights plan to protect the NOL.