Apparently cash is no longer worth 100 pennies on the dollar. Not when the executive officers do nothing to enhance shareholder value and use the company simply to collect the annual paycheck. It's an annuity to them. Shareholders are an after thought, a byproduct, not really a consideration. Run like a private enterprise w/all the perks of being a public company. Been that way for years. Will continue to be that way for years. So cash on the books is like worth 80-90 cents on the dollar, no more. It's not undiscovered. It's trading at fair value and the market has it right given the Rip Van Winkle nature of executive management.
That said, w/all the recent insider buying, I'm not sure I'd let the tax (loss) tail wag the dog here. I'd be a little nervous having to sit for 31 days to avoid the wash rule before getting back in. One big contract changes everything, and if it doesn't happen, they have already said they can size to the market--which protects the downside a bit.
in a very illiquid security that no one will touch. Time to think about an exit strategy or just leave the headache to his heirs who may or may not know what to do w/such an investment. The public market is not going to bail him out or offer any liquidity in which to offer stock for sale. It's more than a tax loss selling issue, and time to think outside the box.
The company went through a significant amount of cash and incurred some debt to build those two wells (luckily partly financed by an LP) and buy the hotel property. They did it in a way so that the Balance Sheet is still liquid and they have a fair amount of cushion. But at some point you have to stop digging and throwing good shareholder money after bad. Neither operation is providing a return to shareholders. It's a breakeven company that generates a small amount of positive cash flow. Yawn.
The bloom is off the rose on that part of the story for sure. You can still own it if you believe in golf. But the money may be better spent just buying yourself a new set of clubs because the story here may be only function of value based on break-up analysis. Don't know if anyone would want the wells. Better shot at selling the hotel and golf courses at some discount on the dollar. Stock could be worth a dollar or so more than current market value. Doubt the CEO will fold his cards though. It's hard to give up being the CEO or Chairman of something, even if it's not worth much.
You don't see this too often w/a company that is still clearly solvent and at least marginally profitable. Feels like a forced liquidation is occurring. Could be anything really---tax loss selling, margin, panic, or just wanting to finally get a good night's rest w/o worry.
Mom and pop investors getting ripped on price ,100 shares at a time, to take their tax loss. At some point you do anything just to end the nightmare I suppose. The company sure ins't going to help you out. There is no share buyback in place to help.
But no way to know if that reflects puts that have been bought and are still open, or puts that have been sold and are still open. In other words, it could be a bet that the stock price is headed well below $7.50 per share in the next few months (which incorporates the 2Q fiscal quarterly EPS report due out in mid-February) if the puts were bought as a speculative downside bet. It could also be just a hedge of an institutional long holding, given nervousness since the COO just departed and the aforementioned earnings release is due out in that time frame. Or it could be someone who sold puts to capture the premium and would be willing to take all the stock put to him at $7.50 per share less the premium he already captured. Anyway you cut it, it appears to be a big balls bet beyond just being long or short the common. Flying trader any thoughts? Is someone betting they hit a land mine in the next three and a half months or just protecting a long position in a stock that has consistently disappointed on quarterly earnings and eroded in price over the last year?
IMO, given the risk of the option expiring worthless (time value being exhausted), one would have to feel pretty strongly that the stock could dip into the $5 range over the next three and one-half months. Not sure when that open interest was put on, or of it coincided w/the departure of the COO. Some investors get real nervous when an executive leaves, especially when the company supposedly has a hot new product in the market and there is every reason he should be staying to "ride the wave". But again it could just be a hedge on a long position given the prolonged downward slide in the share price.
It might be a local issue, approved or disapproved by local referendum (vote). At these oil prices the issue is moot, fracking just won't take place. The environmentalists won't even need to vote to stop it. The Saudis have won, they have gotten what they wanted and backed out the N. American Shale producers. Actually, they want a little more, they want to bankrupt many of them so that they never return or entertain the idea of returning. The Saudi threat to flood the market will always be there now.
The tax loss selling just won't stop. Institutional portfolio managers mostly closed their books October 31, or are already gone on year-end Holiday. But the retail investor just sitting at home or in the office is bailing w/both hands to get the tax loss to offset gains in an otherwise great year for the market. Such a bifurcated market is pretty unusual and really hitting this one hard, with the losers just being dumped wholesale, at wholesale prices. Maybe a buy on this one on December 31 between 3:30 and 4:00 P.M. EST.
Of course this company is far too small for Carl Icahn to even consider. But at that time of year when many of us think about what would jesus do, I wonder when looking at this company, what would Carl Icahn do? The company has a "four-pronged" plan (yet to yield consistent quarterly profitability). I think carl Icahn would have his own four-pronged plan and it would look something like this: 1). Remove some or all Board members and revoke the poison pill. 2). Clawback compensation increases and stock option awards handed out like so many stocking-stuffers in advance of any bottom line results. 3). Gut the cost structure of a company that needs to be profitable in any environment by 25-35%. 4) .Return excess on the Balance Sheet to shareholders and explore strategic alternatives. Now that is a four-pronged plan that makes sense. What do timing differences, installation delays, increased Sarbox compliance cost, and the dog ate my homework all have in common? Think about it.
This company will need years to dig out, and reorganize, and write down everything that will need to be written down. The value is in there. You just have to wade through the garbage to find it.
There is no viable business model for this to exist as a standalone company. It belongs in the hands of a larger, more diversified parent company. As a standalone, this will always be whipsawed by the spending and timing decisions of the car manufacturers. Might as well go to Vegas and bet on red or black.
Management and the directors don't run this company. That is an illusion. The automakers run this company and almost entirely determine its fate. Better to invest in companies that can control their own fate. It's the same problem w/energy companies. In their case, they are almost entirely dependent on the price of oil, something out of their control. It does not matter how good of a manager they may or may not be. Stay away from derived-demand companies that are entirely dependent on the unpredictable timing and spending whims of their customers or commodity prices. Lots of tax loss selling by retail investors remains here over the next eight trading days as well. It's one of the most disliked stocks on the OTC market.
Just take the tax loss if you haven't already in the previous seven years. Insiders just riding the gravy train and collecting the paycheck. This is barely breathing and on life-support for almost a decade. My favorite Karen Quinlan stock.
Gotta be retail accounts selling at market for the tax loss. Pretty foolish not to set a limit price. Feels like real panic and maximum frustration is setting in. Maybe the COO left for a reason.