For who the bell tolls The unsolicited low ball offer for IBR by Velvet should set off some alarm bells in the Chinook Boardroom and among investors.
In my opinion, CKE management lately has been not been very open and forthcoming in providing information about the company - information that, if more freely disseminated could probably have enhanced CKE standing among the both analysts and major investors. This in turn could have resulted in a far higher share price than we have seen over the last few weeks.The pipeline situation is just one example and I will submit others later to this board.
An undervalued share price can unfairly benefit both Board and Management. Despite a share price stagnating, Board and Management are able to continue awarding themselves fees and and options - all the while shareholders are suffering losses. In this type of situation, investors in CKE should be very nervous at the sight of Velvet, side stepping Board and Management, to make their low ball offer for IBR. CKE is ripe for the very same move.
The interesting twist here is that the co founder of Bison is chairman of Iron Bridge Resources (IBR) . Bison of course is the second largest shareholder in CKE. Bison bought into CKE at around 30c a share. Thus an offer of 50% above current SP could get them out of this woofer at a small profit - which may be a great relief to them. Lets face it - it would be great news for most of us if we were table get out of CKE even at cost
Management of CKE needs to wake up to the risks of ignoring an undervalued share price. Do not ask for who the bell tolls…….. You will be the first to go