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Tenaris ADR Rep 2 Ord Shs T.TS.B


Primary Symbol: TS

Tenaris S.A. is a holding company, which is a steel producer with production facilities in Mexico, Argentina, Colombia, United States and Guatemala. The Company supplies round steel bars and flat steel products for its pipes business. It operates through Tubes business segment. The Tubes segment includes the production and sale of both seamless and welded steel tubular products, and related services primarily for the oil and gas industry, principally oil country tubular goods (OCTG) used in drilling operations, and for other industrial applications with production processes that include in the transformation of steel into tubular products. It operates in geographical areas, such as North America, South America, Europe, Middle East and Africa, and Asia Pacific. Its products and services include OCTG, Premium Connections, Rig Direct, Offshore Line Pipe, Onshore Line Pipe, Hydrocarbon Processing, Power Generation, Sucker Rods, Coiled Tubing, Industrial and Mechanical, and Automotive.


NYSE:TS - Post by User

Post by Mediawatcheron May 13, 2020 12:31pm
306 Views
Post# 31022913

Trying to predict how this will end

Trying to predict how this will endHi All,

I could not bring myself to log into the AGM although I will next year to see the last one with the Voting Trust and more specifically, Honderich in charge.

I continue to hold my shares in TS.B for all of the reasons I have cited in the past.  This is not a company that should have a market cap of $26 million with more than twice that amount in cash on the balance sheet.  The market votes assess both the prospects for the business and the track record on leadership.  One is challenging - the other is hopeless.

The Voting Trust is controlled by a narcissistic sociopath.  The definition is as follows:

  • Has a grandiose sense of self-importance (exaggerates achievements and abilities)
  • Preoccupied with dreams of unlimited power, success, physical attractiveness, and love
  • Holds the belief that he is of special or high status and can only be understood by similar people or should only associate with those people (or institutions)
  • Has a need for excessive admiration
  • Possesses a sense of entitlement and expects favourable treatment or compliance
  • Exploits other people to achieve personal goals
  • Lacks empathy regarding the needs and feelings of other people
  • Is envious of other people or think other people envy him
  • Has arrogant behaviours and attitudes
This is not entirely unusual in leadership roles, but what distinguishes Honderich is a complete lack of business acumen.  He was a failed publisher of The Toronto Star and only got the appointment out of nepotism, not because of abilities.  He surrounded himself with lightweights who would do his bidding with a question and desperately tried to discern what crazy version of Honderich was going to show up that day.

The Voting Trust is compromised of another group of privileged imbeciles lacking in any discernible skills or abilities.  They follow the sociopath because he cons them into believing they are only one transformation away from returning Torstar to its former glory.  Not one of them, despite losing hundreds of millions, has had the intestinal fortitude to call out this epic wealth destroying debacle.  You would feel sorry for them if they hadn't inflicted this pain on every employee and shareholder of the company,

Honderich continues to surround himself with weak, incompetent, compliant and dismal leadership.  The Board is comprised of bobbleheads who collect their ever-shrinking fees and perks and pretend to be exercising governance.  They are nothing but window-dressing on a bad carnival show.

Boynton, DeMarchi, the Oliver Brothers and the other gang of hapless refugees from Rogers or old pals of Honderich are merely court jesters to satisfy Honderich's ego.  Step out of line or show some backbone and you will be shipped out with your head in your hand and a big bag of money to keep you quiet.  There isn't a more dysfunctional management team in Canada.

Make no mistake, Honderich will do everything he can to hang onto power.  It's what narcissistic sociopaths do.  The Voting Trust has shielded him from responsibility for the massive value destruction he has presided over, but if the dividend isn't paid then out they go.  

The dividend liability is accruing at $.01875 per quarter or $.075 annually.  To date, they are behind by $.0375 which represents about $3 million to shareholders.  If you bought a share today at $.36 the theoretical yield would be more than 10% and if you got $.075 the yield would be in the area of 21%. 

At some point, the Voting Trust is going to have to decide to pay or cede control.  Honderich will lobby hard to pay and he may be persuasive as he doesn't appear to have lost his control over these docile dolts.  In that case, shareholders will get a nice dividend payment and the day of reckoning will be delayed.  That wouldn't be my preference as it only gives them more time to destroy the last shreds of value in the business before CAMH is called in to wheel them out.

The preferred outcome is privatization by someone with the financial resources to appropriately pay shareholders for the remaining value in the company and to embark on building a much-needed media company in Canada's largest metropolitan area. 

It is virtually impossible to predict how this will play out because of the quality of leadership at the top and cascading down to the executive team.  Shareholders will prevail in spite of this because of the dividend provision and time is on our side. 

Keep the faith.

MW

 



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