When the local payday lender couldn't shake anymore pennies from check cashing customers, they turned to their next captive audience....shareholders. In response to this new found opportunity, BOD and officers exclaimed 'Thanks Schmucks!'
This smells more like a brown out than going dark. Shareholders have been given a turd sandwich.
Ownership is concentrated in the Early family and I think they picked up their marbles and went home.
Good luck. I'm a buyer in the $4s and a seller in the $8s at this point. This company is a cash machine. Unfortunately, management does not believe cash should be returned to shareholders.
The value in this company was transferred to holders of secured debt. There is nothing LG will do to enhance current shareholder value. The smart cookie was paid to do this. He will lead CLF from bankruptcy with a ton of options in the new shares.
Good question. MW paid a #$%$ load of $s (with debt) to acquire a competitor and then destroy it. At the current cash flow rate it will take 3 years to get back to positive tangible book value. It will take another 7 years to pay off the debt. That's a long time to wait.
Once Casablanca realized the balance sheet was beyond saving, there was a refinancing of 2040 debt to 2018 / 2020. The debt moved from unsecured to secured. This was the end of shareholder value. An untrained monkey could tell you that default was / is inevitable. My guess is it was done such that the statute of limitations would run out and it wouldn't look like a complete swindle of then current shareholders. Bankruptcy is inevitable. Secured bondholders have the most value to gain at this point.
The management of FLWS has a history of value destruction. This should be a $15 stock with a solid dividend. Instead, management continues to believe they are smarter than the average bear and makes acquisitions well above book value and writes off the goodwill within 3-5 years after running the acquisition into the ground. So, although I do agree the fundamentals are great, I do not agree that ouabra45 is an idiot trying to scare people.
FTC has to do something to justify its existence. They put their teeth in. There is no letting go. SPLS could go to the FTC with a proposal to break itself up into 5 pieces and FTC will still nix the deal. Starboard should be sued to stop / recoup the $250M break-up fee. SPLS shareholders can do this by derivative lawsuit against BOD for lack of fiduciary responsibility (conflict of interest / related party transaction). Starboard should go home to ODP and pound sand.
Stop hoping for a stock buyback. That will further destroy value. Balance sheet is a disaster and debt load is guaranteed to swallow CLF by 2018. A stock buyback will only hasten the demise by risking missing interest payments before then.
Congrats! Screaming steal right now. I'm hoping for 8s to get more. $2B net tangible equity. $1B debt and $1B a year in cash flow from ops. Market value is 5x cash flow right now. Shorts are going after this like it is a bankruptcy play. I just don't see it. Strong online presence, great distribution network. Amazon can't deliver right now like Staples does. Good risk / reward at these prices.
family money will go to ensuring any viable piece of the business will go to the family. they didn't say they'd look out for existing shareholders.
Better to have the cash if no better investment exists. Special dividends are indicators of BODs and managements with some idea of what fiduciary responsibility actually means.
Leverage concerns me as well. So I'm not 100% sold, but definitely better than an ill-advised acquisition in an over-priced market.
As long as MW runs JosABank like the guy from Apple ran JCP, this is a $10 stock at best. MW just #$%$ away a ton of value by acquiring JosABank then pulling the one go to market strategy that built value. Now there's no value and a ton of debt on the balance sheet.
Until there is a decent estimate of the bottom for the JosABank valuation, I think downward pressure continues. My guess is the valuation is now negative with a boatload of debt along with it. I'm not buying back in until there is a clear bottom for MW price. Personal view is that it is a great value right now, but that doesn't mean it can't go to $10 in the near term.