FormerXBC Inc XEBEQ

RE:RE:Xebec - Major Takeover Target

[tamaracktop]

 That's a pretty blanket statement, although I totally agree with the underlying message, however unlikely a bid would be.

   "Any takeover bid is generally at roughly a 40% premium to the current price which , while an attractive short term gain, is no where near its heading ."

   Takeover premiums depend on many many things, obviously. 

    Is the industry cyclical or secular?
    Is it growing revenues at 100% or 15%.
    Is it a utility, or a mineral deposit, or a software company?
    Is it seeking safe haven from a mountain of debt?
     Are there competing bids?
    Is it friendly, or is it hostile?

    the list goes on, and on. 
    I think we can dismiss the notion that takeovers generally occur at 40% premiums, but I agree that we don't want a bid here, not that it's likely there will be one.
    Any reasonable bid for Xebec would have to command such an extraordinary premium so as to make it prohibitive. 40% wouldn't even be in the ballpark. It would be laughed at.
   Who in their right mind would entertain a bid at a 40% premium for a company whose stock has averaged a 156% gain year over year going back 3 years from yesterday's close. No one would.
   Those numbers would be even more impressive if I cherry-picked the dates. I didn't.
   Xebec won't be a takeover target until its growth rate has slowed, and until Boo is up and running as a utility, providing a steady stream of recurring revenues, by which time Xebec will be cap'd in the mega-billions. By which time the company's founder and early management have long since done the grunt work.