I agree with your analysis. I just don't sense current mgm is the group you want in place to execute this strategy. If they are serious about what they need to do firing the CEO is a must. The strategy failed. He goes. Bring in someone to streamline and it should have been already done.
But at today's price I am slowly buying. It looks like its trying to breakdown so let's hope for some good capitulation here breaking 2.50 which looks like a lifetime low.
That last transactions knocked out the obsolete inventory. Coming up with app net asset value at about 3.10 and 3.3 if you include net PPE. This doesn't include POTENTIAL earnout from Aydin or GUARANTEE purchase of inventory by Citadel.
They bought back about 600k shares and have 1.6k shares remaining on buyback. Avg price around 3.75. Total o/s now at app 7 mill from 7.6.
So we need a NEW projection for this fiscal year? Lets don't wait until November. The last projection included the division sold to Citadel (Lexel).
Will they continue buyback? I mean really execute on the buyback SOON?
I really wish these guys would do a separate press release on the quarter. Hate when companies just post and don't discuss.
This was a stock that defied gravity for so long. However, if they are pricing a rights offering at 2 ( which I don't think will be fully subscribed but indicates where mgm expects to get additional funding) then 1.5 seems like a good entry point given the retail move today.
Going to add a little and wait and see where (if) they actually raise money, cause they damn sure need it.
But shareholders had been agitating for this "hard" decision for a few quarters now. Wouldn't it have been simpler to have taken the 25 million from the dumping and bought a profitable line and presto, viola, etc. Instead they went the way of the greek gods, their hubris showing. They found a way to destroy this company twice.
I cant say I know what the industry view is on the CEO but I will let the performance speak for itself. While I think you can make money on this if it sells off a little more, I have NO confidence in the CEO.
Let's review what just happened. They say if they just STOP producing they can make a profitable company out of the old Stanley line.
Say WHAT! So you tell me they just burned through over 25 million in cash to do what they could have done by NOT doing anything.
Now, we want to let this mgm team have another shot? No Fxxking way. The board should fire the CEO immediately if not sooner. The CFO and Board should bring in a turnaround firm with the explicit goal to make all the necessary sales of assets, employee cuts and firm up a business plan that puts the company at MINIMUM cash flow neutral by the fourth quarter.
After that is done the board can then decide if the CFO can run, they want to buy another line and more then likely bring in a CEO or sell this entire thing.
But I think the BOARD is already negligible (ie the piercing of the BOD liability) should be brought up by someone (Ariel) if they don't fire the CEO. Quite frankly, if a large shareholder wont agitate for it then #$%$ anyway.
Let's be very clear about this. Ed will never "just change" the capital structure. If he did an activist shareholder would have control of this in a heartbeat. So unless he is ready to move on this isn't going to happen. We already have a 20% holder who has to be sucking gas already and seems content to do nothing or acts as if he can do nothing. I suggest you look at his investment as someone who has been a worst manager then Ed.
It appears that STLY will have a large quarterly loss as they close out Young America. After that and some severance charges the real question is what does the company look like and can this management CHOP/GUT sga expense to produce at least a breakeven entity at the new sales level. The Stanley line may be profitable but I doubt it covers sga expense.
Liquidity short term doesn't really seem an issue if they sell the assets and product line even at a significant discount to book value. I still think they may also get some dumping money.
But this management hasn't shown me they have the balls to run a profitable company or make really hard and decisive actions. They should bring in someone to chop this down to size quickly with the goal of either being profitable or an action plan to make it happen. I suspect after all these moves they will go BUY another line to ATTEMPT profitability again. Do you want current management attempting to RE-VISION the company again? They haven't shown me much. As I said before a company with excess cash and bad management is usually left with only bad management.
Anyone see it differently?
The company year end was Feb and this filing is usually done in late May as they must still have 90 days to file the 10-k. So the company is now two months into the first quarter. That filing wont be until mid July.
Really trying to figure out how this is all going to look on the next financial. Selling Lexel will remove a large amount of inventory from the books (5 times greater then purchase price) roughly although it can be recovered as sold to some extent. Still it will appear as a loss of book value. Also, this will cause ANOTHER earnings revision lower since it was in the last eps estimate and of course its likely they miss AGAIN.
A lot of the sold divisions could lead to earn outs and additional proceeds but it may take a year or more for that to be realized. So I suspect the shares could be volatile.
Who will run the company or are they trying to sell what is finally left?
I want a cheap price (3.25 or lower) to hold through this or until the "company" decides to buy some more shares at 3.85.
back on April 16 someone was trying to sell 67,000....maybe they finally sold?
I was buying at 3.25 although don't know if seller is done and why they are selling.
In one of the 8k filings when they listed worst case/best case they showed their recovery as between 500k worst case and 1.5 mil best case.
This trading seems a little strange to me. Every time it tries to move up, right back down like a magnet. It almost feels like a market maker or firm is trying to accumulate maybe for an insider purchase or something.
My cynical side says its down cause someone continues to sell...
There should be a transcript shortly because they covered a tremendous amount of stuff.
Re the RMS Titantic artifacts they are having two new appraisals done, one probably available 120 days the other maybe 180 days. Really nothing new to report here other then they think these are worth more then the market cap of the company.
Looking to raise 10 million in 3-5 year debt at an interest rate between 12-18% with no equity dilution done by Merriman (sic) and another firm that Merriman farms it to.
JPM says that the operating assets (not including Titantic assets) are worth more then market cap. (two ways to win huh!)
They cant can debt financing against the Titantic assets as the covenants forbid this.
They claim with the 10 million they can make 15-17 per year in ebitda in 2016/2017.
There were some good questions and a complete breakdown of what they want to use the 10 million for (from refreshes of existing displays, acquisitions, digital database, a complete new show for the new location.) The 15-17 per year ebitda includes the whopping interest expense and they believe it will be closer to 18% then 12%.
There was much more covered but the transcript should be available by tom. evening if not sooner. Sorry if any typos.
The 10-k is out and majority of the lease renewals look to be for 1-2 years although for some reason there appear to be some renewed through 2020+ which I don't really understand unless there is a kick out or these represent locations the company felt were worth securing (no location is worth securing once it becomes CF negative.)
The key here appears to be operating cashflow. The last three years show about a 50% decline (still positive) in operating cashflow. With the declines in video and music accelerating how much longer can they hold serve?
They are raising some capital with warrants and or debt so it could be falling to the price that they issue warrants, stock, debt, etc. At this point I would just like to hear or read the current plan regarding financing or strategy.
67000 on the ask, selling.
Interesting, yesterday I pulled all my limit buys and literally seconds later stock went whoosh....
Yes, I listened as well. They were all chatty for sure. Look, any capitalization that allows an owner voting control without owning majority of shares is priced as such when it doesnt perform. This isnt Google. Why should Ed give this up without a reason. Of course, his "show me a study" comments regarding this is almost childish.
The biggest thing I took out of the call was that he thought they were close on an acquisition that would possibly add 50 million in revenue, it is a complicated transaction and of course it might not happen in our lifetime if at all.