The Little Company That Angered The Day Traders OTOnce upon a time there was a little corporation that, due to circumstances mostly beyond its control, became the target of unrequited love and solicitous offers. It’s royalty revenues since the great financial crisis, were real and profitable but flat.
All concur that its globally recognized talents in cost cutting during lean years, and its outstanding relationships – off balance sheet assets worth several times its book – were the envy of many of its more robust competitors – the little corporation was and remains a leader in its industry.
The company hid itself well from predators. While easily qualified to up list to the full reporting boards, it elected to be a reporting company hiding on the Pink Sheets, there, sitting quietly with a much coveted “Current Information” rating it proceeded to perform its award winning product conceptions. Suddenly however by this twist of fate, the little corporation took itself down to a local watering hole in the middle of a week day and announced that a formal offer for control had been made for its shares.
“Hey guys” it said to the financial moguls that preyed for the little corporation’s consulting work, “take a look at this and tell us what we ought to do…” And so, out came the grizzled fellows of the legal and accounting world, to the task, while the little corporation sat, mulling the unfairness of Business and dreaming in a pre-strategic way of how it might rid itself of this positive prominence.
It started quickly, the rumor mill, the chat boards, the short term and even the day guys. As different as Buffet is to the man on the street whose job has been shipped off overseas, these day traders had no interest in the strong fundamentals of the little corporation or in the reputation of its fiercely independent management. Forewarned, they nevertheless moved in to cash in on the control offer. The pace never slowed, even as management warned that it did not a fortiori see a shareholder benefit in the transaction.
Of course the little corporation asked all the necessary questions. It even expressed appropriate envy and congratulatory zeal to the raider. It couldn’t help itself when it said to the invader “I see that you might think yourself all mighty and powerful, but consider that your revenue stream is only high this year in comparison with that of others that have been depressed by conditions that may quickly change”.
The little corporation realized very quickly however that the raider needed more than its brands and conceptions, it was targeting the little corporation’s pyrrhic operating efficiencies, and possibly even its dramatic R & D activities. Without the acquisition the raider had only one direction to go: down.
The little corporation sat and thought, and began over the following three and four months to feel a great deal better. It was dejected about its decision to favor cost efficiencies and purchasing methodology over sales, never losing the R & D ball, but, it thought “I’ve got nothing but upside compared with my established raider friend here. My best days are ahead. I can grow without a lot of fuss and muss. My projections for this year are already in the black.”
And so both sides pondered for a bit more, the little corporation increasingly cheerful, the raider sinking into the murk. Try the raider did, again and again it said “we’ve eyed you with great interest for quite some time, just as your competitors do, you’re a great little fellow, and you’ll fit perfectly, you’re on the come and I must acquire control of you, that will solve a lot of my problems.”
Well the little corporation’s decision was to protect shareholder long term interest. Its guru consultants agreed and the news of “ney” in the press release was a terrible blow to the expectations of hungry triple bag day traders. They sold and sold one chasing the other, the price of the shares tumbled creating fabulous opportunities for the little corporation’s faithful longer term investors who gobbled up the shares as fast as the day traders were throwing them.
The little corporation, a successful internationally acclaimed developer of consumer, professional and industrial products, the best known of which is the Clean Plus® brand was right to turn and run as fast as its little legs could carry it.
As to its shareholders, well witness the bounce, heck I’ll even trample my neighbors and get on the wagon for a few thousand ; symbol FLKI.
Falken Industries Ltd OTC : FLKI is a diversified industrial conglomerate that operates in Chemicals, Wet Wipe and Biodegradable Technology. Falken Industries Ltd is the concept behind more than 160 products distributed through a network of global platforms and the recipient of trade awards for innovations, biodegradability and environmental and health quality standards.