Went back to the 2011 10k and look at the selected financial data summary-for years 2008, 2009 the equity was near 300 million and yet the stock price even back then was between 6-8 discounting Ed's management and of course the equity structure. Look at the stock chart for those periods. So this isnt new.
The sale fattened the balance sheet with cash which got everyone excited. Value investors chased.
Meet the new boss....
You were right! Read the transcript and that was one of the more hostile calls that I have read and Ed gave every one of them the Heisman at the end of each missile. Ed said they need to be at 190 million for profitability and that wouldnt happen until fourth quarter of fiscal year 2017!!!
So good luck with that.
Of course, investors will run. Then Ed will tender for a million shares and laugh, laugh, laugh. But he does appreciate your opinion.
They just published May 31 financials. Subtract the cash for the June 15 purchase and you have what you need.
It looks like Ed is basically unwinding his sale and deploying the cash without changing his capital structure. Looking back at the chart if this breaks 7.3 its right back to six and you have all these shareholders trapped with large losses. Trace the chart down and this stock traded at these levels prior to 2010 for a long, long time.
The obvious thing is the company should be selling itself but Ed wants to keep it going and it doesnt seem he really cares to sell and the shareholders cant do a damn thing about it.
What the earnings report could look like-huge inventory writeoff (maybe half), write off of capitalized software and some equipment, and the thing that would hurt the most=projection for a large earnings loss for the year. The first two arent back breakers but the third is what the street is really looing for or the price wouldnt be at 2 with 3 in tangible book which would allow for the inv writeoff and the ppe writeoff isnt in tangible...
They have over 20 million in capitalized sw/website dev and plenty of fixed assets that could be impaired....so it can be material. I dont think its that relevant but it may speak to a larger inventory writeoff and larger future operating loss. Those are relevant.