Their oil business has failed and they have no strategy for sports. Furthermore, they are a hard management team to trust because they do so much self dealing. With that said, I have bought some recently although I think I will end up regretting it.
They have about $220 million of cash and investments and $70 million of debt. Hopefully, they can figure out what to do with the remaining cash other than buying sports companies that they run into bankruptcy.
They are much smarter than their track record with SXCL in the last few years. Hopefully, they do something to demonstrate that. If not, this is going to trade through NAV and we'll see 14 soon.
Look at the performance of the WL controlled companies: SXCL, HNH, MLNK, SPLP. There are a couple other smaller holdings that have been sitting dormant for years.
There's a lot of talk about superior operational performance and investment returns. But there is a common theme in his investments. They dramatically underperform. I tend to think he makes decisions that cause the underperformance so that he can increase ownership at lower levels.
Examples: increased HNH at $30, increased SPLP at $12 a couple years ago, increased MLNK mid-$3's. I'm sure there are more.
Watch what he does, rather than what he writes about.
With that said, there is good value in most of these holdings and I hold some from time to time. I'm just not sure it's a good idea.
Did you notice that Jack Howard sold $500k+ worth of shares on this move? Kind of surprising that he'd sell at these levels. Maybe he needed some cash and his only options were HNH, SPLP and SXCL. At any rate, I find it curious that he'd sell here.
Jersey, I don't disagree that the company's near ten earnings will be down as a result of the interest. Question: is it a permanent reduction of earnings power or has the long term earnings power of the company been impacted? I do see why people don't like it. I'm just giving my perspective.
The dividend was a tax efficient way for large shareholders to pull money while still maintaining the same ownership in the company. Controlling shareholders believe there is long term value. People focusing on the lower EPS as a result of interest expense are missing the boat here. The way to value to company is on an EV/EBITDA basis. That method allows you to value a company irrespective of how it is capitalized. The stock is priced cheap on that basis. In 5 years, they will be able to pay off the debt and earnings power will be restored to previous levels, probably better.
EPS are impacted by things such as interest expense and depreciation.
I'm surprised the stock went above 36, but it confirms that the value of the company is well north of 36. If they want to do a tender, they'll have to raise the range. NATH is my largest position and I don't currently plan to sell any shares.
It's nice to see it finally catch a bid. I sold my shares at 23. GLTA. I'm sure WL will find a way to get this company back on track eventually. in the meantime, I think his other main holding in SPLP, HNH, is a good risk/reward at 25. It's trading at only 6x EV/EBITDA while owning several solid businesses.