Price offered is fair in my viewI think it is important for everyone to consider a few things when looking at the $0.43 consideration offered:
- R&D has been capitalized at the rate of $470K in 2016 and $760K in 2015. Adjusting for this the valuation is 15.9x P/E and 12.1x backing out the cash on the balance sheet. This feels pretty reasonable for a cyclical aerospace company.
- The commercial product has been talked about for years however there is no revenue to show for it yet so who knows how long it will take to get off the ground and how big (or not) it will be.
- The stock hasn't been this high since 2002.
From my perspective yes the offer isn't amazing but that said it is fair.
The Board did their job to do a full sale process and approach other parties and no one was willing to pay more than $0.43. Pender is smart and they agree. If they thougth it was worth fighting for more they would have.
Here are our options:
- Either we vote against the deal and the stock goes back to $0.30 and take our chances at the commercial product and wait another 2/3 years hoping the business jet market doesn't tank in the meantime.
- We vote vote the deal and take our 40% gain and move on to other good ideas.
Personally I have voted for the deal. At the end of the day the offer is fair. Sometimes a bird in the hand is better than 2 in the bush.
Best of luck all