RE:RE:RE:RE:RE:RE:DCI issues share buyback bid
Smallcap.....Hey, don't shoot the messenger. I'm just trying to inject some reality and counter arguments into the conversation. You should be thankful that someone who has been, and still might be, exposed to this business for years is taking the time to impart his knowledge, understanding and experience.
I've been pretty accurate since I started posting here almost two years ago. In fact, I challenge you to find a single post of mine that hasn't, in hindsite, been accurate.
Importantly, I direct you to my post from February 16th which commented on some well known 'semi-public' information about issues in the land of Oz. Previously, I had stated that I was willing to wait and see how the 'Australasia' business would react. However, once it became clear that DCI may have lost some major contracts, I was courteous enough to take the time to throw up a warning flag on Stockhouse. As we all now know, 'Australasia' in fact contracted over 6% in transaction volume in the annual report. Had you taken the time to lessen your exposure to DCI at the time, you might have avoided the 20% drop that's occured since then.
Now....as far as why Mr. Smith might want to spend some of his personal fortune to buy DCI shares? Well, first off, know that Mr. Smith is a very wealthy man. This is not a large purchase for him. If you've followed this stock as long as I have, you would know that he also made a very significant purchase back when the share price was in the $6 range. Around that time, I did so myself, as the stock was reacting to the market meltdown, as opposed to any significant questions concerning sustainability. (I also bough CATM when it was trading under $1.00 ;-))
However, with this relatively small purchase (relative to his personal assets) I can think of a few reasons why he did so at this time. Among them:
1. He genuinely has a positve outlook on the direction of the company, and believes he can enjoy some healthy capital gains once the market sees what he sees, or
2. He is worried about the continued recent drop, and is attempting to personally stop the bleeding. With a company as heavily indebted as DCI is, there has to be a certain level for the market cap, a 'line-in-the-sand' if you will, where lenders might be concerned if DCI falls below. Historically, DCI is a very thinly traded stock, and on many days, trading volume has been under 20,000 units. A purchase of 10,000 units by a motivated buyer in a single day might have, in the past, caused the stock price to rise by over a dollar. Imagine what the drop might have been on April 3rd if Jeff hadn't of stepped in and personally accounted for almost 20% of the purchases on that day.
That said, Smallcap, if you are going to rely upon insider stock transactions as a metric, I would be more concerned about Susan Anderson, aka Susan Gallagher, one of the three original co-founders (along with Jeff and Susan's ex-husband Bill) selling almost half-a-million shares in February. What did she see coming that the small time investor didn't?
Anyhow Smallcap....good luck. I personally can't see too much more downside until the next earning report due in Mid-May, unless CSF actually files for bankruptcy. And who knows? Maybe DCI will have righted the ship by then. That said, I'll keep Stockhouse posted if I hear anything from a general industry perspective.