He has lost his marbles.
Mgmt are criminals. The entire company is a long running fraud of epic proportions.
But they are very good at it. Many victims don't even believe they are victims.
Leasing to someone else does not eliminate what WTSL owes. It might reduce it a bit. Only bankruptcy gets them away clean.
All those stores they closed were going to be a cash flow drag all year.
The remaining company might have a fighting chance with a bankruptcy.
I had this on my watch list at much higher prices. Glad I didn't buy.
I speculated that between CASH & WTSL, one of them would go under and the other might go up 2-4 times. But now it looks like they are both going under.
No, the $6.8 million EXCLUDES the leases.
"Such estimates do not include any claims or demands which may be made by the landlords of the impacted stores for unpaid rent or otherwise."
I cant imagine that all their leases can be easily walked away from. If they have 4 years left, they are expected to pay the rent for 4 more years. Or maybe negotiate a slight discount for cash in advance.
A bankruptcy, on the other hand, solves the old lease problems.
Cant imagine current shareholders getting anything if the malls don't get paid.
Its probably going to be some kind of pre-packaged bankruptcy where new money gets control and nobody is going to put in new money if they are going to have unknown lease liabilities.
90-99% shareholders get nothing. Or they get a warrant that's WAY out of the money that its effectively worthless.
Biglari has been making a lot of moves that seem questionable at best from a shareholder value perspective.
Its not unreasonable to question his motives with the more recent moves.
Ive been with Biglari since a few days before he took over WSZZ. And then bought a lot more SNS after he started buying.
So Im not a johnny come lately.
Sure looks to me like his recent moves are highly questionable.
Just like some of his past moves.
If the 4 owned properties do not sell for what they expect.
There will be hefty management fees for the new guys so their incentive is to increase assets under management moreso than per share value.
Ideally, it will be a win all the way around.
But, I don't see any reason for the shares to go to $1.40 anytime soon.
But it could.
We need to think of it in terms of the price after the reverse split. $10.60. With the $14 warrant that benefits but does not obligate mgmt.
I guess much depends on the proceeds of the properties, which Im hoping will not be below the $1.40 but if it is, the rest of us eat the loss, not the new guys. And, best I can tell there isn't really any incentive if they bring above their expected value.
So we will end up with a brand new REIT. They could probably do things which would benefit themselves more than paying $1.40 for $38 million worth.
So they could sit on that warrant for years if they wanted.
Hard to know what will be here in 2-3 years from now or where the stock price might be.
You have to think an NYSE listing for a reit with experienced mgmt is worth something...at least to the managers.
I will probably just hold my small position for years to come. Or maybe sell it from my taxable acct and buy back in my IRA.
I see no need for the shares to jump to $1.40 at least until we see what the new guys will do.
The impending split is at least a mild negative.
They also got warrants to buy $38 million more a $1.40 which, it could be argued is worth 30-35 cents per share.
Thus, the current price of about $1.06. Been a long wait here. I was afraid to buy more.
Seems like a good deal for both sides. We don't get diluted too bad and they get a public shell for no premium.
With their contacts, they could have big plans for this little company.
But, I don't think its going to jump overnight. And you wonder if they really want a $1 stock ?
Might a reverse split be in their minds ?
Got the proxy Saturday and will read it soon.
My position is very small here.
Will be interesting to see if they start buying in the open market after the deal closes. They don't really need to. But they could.
Would seem like they would have to do another extension soon unless the property sold.
EDCI Holdings, Inc. Announces Approval of the Extension of EDCI’s Existence
Dec 19, 2012
OTC Disclosure & News Service
New York, NY -
NEW YORK, (Wednesday), December 19, 2012 /OTC News & Disclosure Service/ -- EDCI Holdings, Inc. (the “Company” or “EDCI”), today announced that the Company has received approval from the Court of Chancery of the State of Delaware for an extension of EDCI’s existence beyond January 25, 2013. The extension is effective through Jan 25, 2015, or such earlier date as all the assets of the Company are distributed, and subject to further extensions as may be requested and approved.