RE:RE:$310 Million US in InvestmentsHey all - just coming back from a few fun days splashing around in the Oil Patch, some fine returns to be made there! Not for everyone mind you, only folks that like to make some good coin.
I was going back over some of this history, and my Golden Retriever (his name is Kona - and yes, he's a boy, so there's that), pawed me and barked at the screen ... so I'll take a look at this one through the lens that Hadituptohere is Aimia IR.
1) 25M is 3.5 times the current NCIB ... is there an SIB coming? How is it that the share price would remain (still) SOOOOOOO suppressed through such a buying spree?
2) It's called a shareholder return, and everyone would like some ... SOMETHING ... ANYTHING
3) There seems to be a fixation on the tax credits by the management team, and statements that they will buy a profitable going concern to use them ... so where does buying a basket of market equities come into the picture? Are we looking at a 180 degree turn at the next quarterly? In corporate taxland can divs/cap gains be offset by tax pools?
Me, I have nothing personal with Mittleman, it's just that he's done nothing since 2008 ... and that was a very, very long time ago, in a chimp-with-darts market. I printed a picture of him and put it on the floor, and Kona peed on it. So I guess he has a firm position <shrug>
Anyways, we will be paying close attention to happenings in two weeks to see if they line up with the above fantasy. And god help me, I even sunk some more of my oil profits into this thing in the event that anything happens.
On the auto-NCIB, Kona approves that someone else should be authorized to take action, as it would appear management at Aimia really isn't capable of making a sound business decision.
Steaks and Chateauneuf tonite, GLTA and have a great long weekend.
Hadituptohere wrote: To me, and I believe to most with my level of experience in these situations, the path forward is glaringly obvious and simple. To repeat:
1. Repurchase every share available, immediately, upto $7-8. Every buy at $7 is an automatic approximate net gain of $3 of equity for shareholders (a 40% return). Every share bought at $6 is an automatic $4 gain (a 65% return), and so forth.
If they repurchase 25,000,000 shares at an average cost of $6, there will theoretically be an additional $150mm of equity, which divided by the theoretical newly reduced share count of roughly 70,000,000, will add more than $2/sh in fair value. To be clear, the board spends $150mm right now to create $400mm in immediate value for shareholders. There is no reason on the planet for this to not be done. It's the easiest decision in the world and every day it isn't results in an incrementally larger hit to board credibility.
2. If it can be done in a tax efficient manner, issue a one-time dividend of not more than $1/sh to appease those seeking income.
3. Invest the majority of the rest into liquid investments. Going from private holding to private holding will do nothing for fair value, nothing to appease chronic liquidity concerns, and if their track record on private deals is our guide, nothing to create value beyond what the Mittleman post bear market track record suggests.