RE:Silverdale visit notesUndervalue: They have sold a lot of townhomes already. The JV has sold a lot of lots to a builder, and has commitments on most of the remaining townhomes and lots.
So where is the free cash flow and the growth without dilution? After such a successfull start?
I see the reported profit. I assume you do. What about the free cash flow to the Public Co. from the JV? I don't see it. It would be in the form of a dividend from the JV to us! In fact, my friend, the $$$ is going the other way for 2021 and 2022, isn't it!
Why don't you call your friend Sam Grippo and ask him why the money is going INTO Silverdale LP from the Public Co to buy 2 transactions, in the past year, acres at $1M per acre for a few measly acres here and there. Better yet, try and find out WHO or WHOM we are buying them from? That is where your money is going. I call it the friends and family plan. The sellers are probably parties 1 or two degrees of seperation from Uncle Sam himself. JUst that they are not telling you and me that they are related parties.
I think you are really really naive. You think Sam Grippo and his fellow insiders want to share fairly and equally with the Public Co. shareholders. I do not. I went back and looked, the original acres where purchased in 2016 for 900 acres. The price per acre was very low. The JV was formed. Then we did buy more acres into the JV for 400 acres at almost twice the price in 2017. IN this buy they did say that the seller was a related party to a shareholder of the company. It was almost twice the price for about 1/2 the acres. Went into the JV.
IN any case the cost basis per acre is very low, compared to what these condo's and houses are selling for. We only used up like 35 acres for the first sales. So that would still leave about 1350 acres or more left to go. So, your the business person whom likes Sam and his "story". Why put money into the Mission JV to buy more acres at $1M a pop per acre, when you have all this inventory ready to go? I think Sam is selling you his 100% owned acres at at least FMV, if not more, to the JV, and since he owns half of the MPC public shares, and they own 1/2 of the JV, the economic loss to him on these land sales thru the Partenrship and the Public Co is only 25% roughly.
I think you need to do a little more DD next time you are in Mission or look at the land records to see where these small parcels are in relation to the 1400 acres and the development!! My guess they ware way in back and way up the hill on some ledge!
I think Sam is paying himself first and and is going to pay you and me last, if ever!! The IFRS JV accounting is minimlal, so you need to see the land transactions and the JV books.