nice little run with the big nat gas rally. Starting to look like an attractive short play, but with nat gas surging again today with below avg temps around the nation, this thing will probably stay afloat in the near term.
They are also rebranding their website. Looks like a move to aggressively expand the business rather than just let the business go on autopilot. This is a positive.
Shareholders have been successfully shaken to sell their shares at fire sale prices to big money and big funds. Now the turnaround story begins and the bankruptcy talks end.
Best turnaround story of 2013!
Covington is holding a ton of shares with the earlier intent of doing a buyout. It looks pretty apparent that management isn't remotely interested in selling out, especially given they hired a new high paid COO.
A lot of Covington's capital is tied up in AVCA and shares just keep sinking lower as markets make record highs. If management is not interested in creating shareholder value, just keeping the business afloat to pay themselves massive salaries, Covington must be looking for an exit strategy as capital trapped in AVCA is erroding away and better deployed elsewhere where they can actually earn a return.
If I were Covington, given management has no interest in allowing Covington to buyout the company and is doing a poor job of even maintaining shareholder value, I would look to sell my shares. Thoughts?
look at the heavy volume buying on a down day. This after analysts downgraded JCP with low teens as price target and hedge funds shorting both the stock and the bonds. It took a while but turnaround is finally starting to bear fruit.
You will likely get some form of update on the business just like if you owned any private business. But being a really small shareholder and the company not being public, info will be limited. Biggest concern is when you want to sell, who will buy from you. Executive management may want to buy your shares if you had a lot and it would materially change their ownership %, but will probably not want to waste time on a thousand shares here or there from small investors.
yeah, pretty impressed they actually were profitable. Mgmt has had a bad track record of perpetually destroying shareholder value, so people are probably still reluctant to jump in without seeing a few more solid quarters. Plus deep pocketed
CHK is after them in a major lawsuite.
Probably still a bit early to have jumped in. With the Martha Stewart issue that hasnt been resolved and not likely any catalyst in the near term to materially increase sales (conversely, the renovations will likely depress sales for another quarter or two), there is more likely negative near term news than positive. The Martha case, which is now in mediation, is probably going to have a negative ending. If I were Macys, id do everything to foil this and drag it out as long as possible, which would result in big losses for JCP on the items they've ordered that were designed by Martha and have empty shelves. Most analysts also have revised price targets to the low teens and without material improvements, I dont see any optimism coming from the analyst community.
After another bad quarter or two, it may make sense to pick up some shares closer to $10 range and bet on the holiday season as well as a potential turnaround. Now is too early and too expensive in my opinion.
Buffet testing natural gas engine powered railroad trains. Cramer says load up on WPRT (FSYS), as this is the beginning of a multi-year nat gas conversion cycle. Nat gas will be theme of the next decade. I see institutions picking up FSYS as part of their portfolio to ride this nat gas wave.
Sentiment: Strong Buy
Key benefits is less operating costs of being listed on an exchange, complying with SEC filings and regulations (SOX), reduced financial reporting staff needs. It also is less of a distraction to management. However, the costs far outweigh these benefits, especially for small shareholders who don't own enough shares to have a say on anything or have much visibility into the business. Worst of all is the difficulty in assessing the value of your shares and finding someone who will buy it from you at a just price. You could be holding the shares indefinitely. Small shareholders are worst off, while large shareholders, who have enough to influence the board and have access to info are better off.
On page 31 of the latest 10Q, SSY states the following:
If our Odd Lot Tender Offer is successful, holders of our securities will be subject to the risks of an investment in a private rather than a public company.
If our Odd Lot Tender Offer is successful, holders of our securities will be subject to the risks of an investment in a private rather than a public company. We intend to apply to the SEC to deregister our shares as soon as practicable after completion of the Odd Lot Tender Offer, if we are eligible. Upon deregistration of our shares, our duty to file periodic reports with the SEC will be suspended for as long as we have fewer than 300 record shareholders, and we will no longer be a public reporting company. In addition, we will be relieved of the obligation to comply with the requirements of the proxy rules under Section 14 of the Exchange Act. After the Odd Lot Tender Offer and deregistration, SunLink shares will no longer be listed on the NYSE Amex Equities stock exchange, and there may not be a sufficient number of shares outstanding and publicly traded following the Odd Lot Tender Offer to ensure a continued trading market in the shares in any over-the-counter market. The continued quotation of our common shares as well as the availability of any over-the-counter trading in our common shares will depend, in part, on the nature and extent of continued publicly available information about SunLink. Shareholders also could be adversely affected by a reduction in our “public float,” that is, the number of shares owned by outside shareholders and available for trading in the securities markets, especially if the Company makes future tender offers or private or open market purchases of its common shares. The suspension of our reporting obligations under the Exchange Act may further reduce the existing limited trading market for the Company’s shares and may result in a decline in the price of the Company’s shares and reduced liquidity in any trading market
they did that to entice really small shareholders to tender their shares. You can't take advantage of it now as it is only effective for shareholders as of jan31 2013. Remember their goal is to reduce # of shareholders below 300 (SEC requirement) to be private. There are many shareholders with under 100 shares, so by getting them to tender, they would have achieved the 300 goal with not a lot of money.
Put yourself in mgmts shoes. Assuming their plan works, they go private with only having to spend $200k. You will still legally own part of SSY, but it would be private. Very difficult to assess what shares are worth at that point and good luck finding a buyer. Think of it as buying into a local business. When you want out, you can't just hit the sell button, you need to find a buyer and negotiate a price yourself. Nobody, other than mgmt shareholders, wants to be that type of shareholder, which is why I think the stock is tanking.
If they were gearing up for a buyout offer, they could have skipped the odd lot step and simply jumped right to a buyout offer. From mgmts point of view, this biz is deteriorating, but still able to pay themselves a nice salary. It is costly, time consuming, and stressful to maintain SEC filings, requirements, and PR.
If you read their latest 10Q SEC filing, in the section on the odd lot towards the end, they state that odd lot shareholders represent about 1% of the company shares. They currently have over 500 shareholders and the way to not be subject to SEC filings, public audits, and reporting is to reduce the shareholder base under 300. The cost they estimate of buying out these small shareholders is about $200,000. They do intend to be a private company, but not by an outright buyout. If they succeed in reducing shareholder base, existing shareholders will own a private company is my conclusion when reading the 10Q. I only researched this because I was thinking about buying to capitalize on a potential buyout, but appears to me, they simply want to be a private company with many shareholders. I wouldn't want to be a shareholder in a private company like this because it has very little upside potential and the most likely scenario is mgmt continuing down the path they are on for the foreseeable future (they still get a nice salary and will ride it into retirement). If I want to sell my shares, I'd have to convince some private buyer to buy it from me like being a partner in a private restaurant biz. imagine the headache of negotiating a price (no market) and finding a buyer. Other thoughts appreciated.
Appears to me there is no benefit to owning the shares for any near term price appreciation. The only reason to own SSY is if you believe that their business model will generate siginificant shareholder returns over what could be a long drawn out multi-year period. Further, you will have to be a private shareholder and loose transparency into the company and not have a readily available market to sell your shares if you wanted out. Would appreciate other thoughts on why it makes sense to own here.
- Odd lot purchase of shares from holder of less than 99 shares with the goal of going private. Without an outright buyout, SEC will not allow them to avoid SEC filings and be a private co. with over 300 shareholders.
- If successful in reducing # of shareholders, existing shareholders will own shares in a private company (not publicly traded).
- Being private will make it difficult for shareholders (other than inside mgmt) to have a clear picture of what is going on.
- No public market for shares. No sense of what shares are worth.
- Mgmt owns the majority of the shares so non-mgmt shareholders really don't have any say in the business.
- Company owns poor undesirable assets (4 small hospitals and an empty building in Alabama that is worth at most $1.5M if they can find a buyer).
My opinion is that if they reduce the # of shareholders to required levels, they will delist. This will make mgmt's work a lot easier as they no longer have to maintain regular filings with the SEC, which can be time consuming and costly. Mgmt will continue to run the business as is, but I dont see much potential value creation as there really isn't a whole lot of improvements that can be done (small hospitals in rural unpopulated areas). The only benefit is mgmt, which will continue getting a nice salary but have less accountability and transparency. Why would anybody want money tied up in shares that have no market and no transparency into what is going on at company?
Either they are dumb as a rock or trying to manipulate the stock so they or their clients could buy really low. When FSYS is in the mid $20 range, they will probably come out with upgrades so that their clients could sell at high prices before others take profit.
The Piper Analyst who downgraded FSYS pretty much at the very bottom should be fired. How pathetic is that? We needs analysts who say buy after the stock has rallied and sell when it has already fallen off a cliff? Unreal the people who call themselves analysts!
It collapsed when the updated loan proposal for an additional $50M hit the news wire. Investors might have viewed this as a liquidity crunch. It states that mgmt intends to use proceeds to retire 2015 floating rate debt, but not sure if there is more behind it than that.