RE:PvE gets kicked out?I've got mixed feelings about the Kingsway challenge to Kobex.
On the one hand the Kobex directors deserve what might be coming to them. Their communication which sharesholders has been incredibly bad. They should be providing a running commentary on what they are doing and why they are doing it. But they have said nothing. For example, why did they invest in mountain providence diamonds? I'm not saying it is a bad long term investment, I'm just saying they should explain to the sharesholders (ie the owners of the company) what they hope to achieve. Also, the Kingsway criticism of giving directors stock options below intrinsic value is valid. Finally, Kobex have had a long time now to evalulate investments in a very depressed junior resources market and they have only invested in one company, is this really the best they can do? Are they waiting for the market to get even worse? If so, why not say that to shareholders so we at least know what is going on?
But on the other hand.... As I understand it, PvE has substantially reduced costs since his arrival as chairman. Kingsway proposes to replace 4 existing directors with 5 new ones. Is this really cost saving? Also, I find their criticism of the mountain providence investment really annoying: (i) they are being wise after the fact (a truely sickening trait of investment bankers); (ii) they do not acknowledge the fact that ultimately the investment may pay-off; (iii) they argue againt it on the basis that it not started production and is operating in a depressed market, but these may equally signal that Kobex is getting in when the price is at bargain levels. Their criticism makes me think that the Kingsway investment philosphy will be to chase the latest trends, which is completely the opposite of value investing.
Anyway, I hope the fight between the existing Kobex board and Kingsway will; (i) bring some attention to the current undervaluation of Kobex; (ii) encourage the existing board to further cut costs/positions; (iii) force some improvements in communications with sharesholders.
n.