RE:$310 Million US in Investments I have numerous objections to current board and management decisions and have made those deep concerns known. However, I respectfully disagree with nearly every assertion you make here.
I have no objection to the holding company structure, I do not wish for any dividend of the magnitude you desire, and I do not want the carrying value of Kognitiv to be written down to anything less than a fair multiple of cash flows. Your recommendations would result in higher taxes to the company, higher taxes to the shareholders, and a falsely large impairment to NAV. There would be no value creation, but instead lower street estimates of fair value and fresh concerns about their balance sheet.
Also, as I have stated I do not share your extremely negative view of what performance to expect out of Mittleman over the next 1-2 years. His presently mediocre long term results conceal a crucial reality: coming out of the dot com bear market, the credit crisis, and the pandemic, he absolutely destroyed the markets. In my opinion, he should be relied upon as heavily as possible in the near term, especially considering that as a wholly owned sub he will cost them nothing. Replace him down the road if need be after he triples this money, at which point Aimia would control a much larger portfolio and provide the income stream you are hoping for.
To me, and I believe to most with my level of experience in these situations, the path forward is glaringly obvious and simple. To repeat:
1. Repurchase every share available, immediately, upto $7-8. Every buy at $7 is an automatic approximate net gain of $3 of equity for shareholders (a 40% return). Every share bought at $6 is an automatic $4 gain (a 65% return), and so forth.
If they repurchase 25,000,000 shares at an average cost of $6, there will theoretically be an additional $150mm of equity, which divided by the theoretical newly reduced share count of roughly 70,000,000, will add more than $2/sh in fair value. To be clear, the board spends $150mm right now to create $400mm in immediate value for shareholders. There is no reason on the planet for this to not be done. It's the easiest decision in the world and every day it isn't results in an incrementally larger hit to board credibility.
2. If it can be done in a tax efficient manner, issue a one-time dividend of not more than $1/sh to appease those seeking income.
3. Invest the majority of the rest into liquid investments. Going from private holding to private holding will do nothing for fair value, nothing to appease chronic liquidity concerns, and if their track record on private deals is our guide, nothing to create value beyond what the Mittleman post bear market track record suggests.