Harvard Biz School case study...with emphasis on BS Long time lurker, first time poster. I've never seen a company squander such an incredible opportunity before. In all seriousness, HBS students should study what has unfolded here as a guidebook of what not to do in running a business. Not only has aimia mishandled every investment made in recent years, but they've done so in epic proportions. What's worse is that they've rewarded management, who were finally shown the door, every step of the way with outrageous compensation packages. Yesterday's results aren't Tom Finke's fault, as he's stepped into a difficult situation. But he didn't inpsire any confidence yesterday. All the commentary seems to be framing this as a turnaround story. That alone is unbelievable, considering the company received more than a half billion in cash from their asset sales and could have acquired any cash-flowing asset in North America to leverage their significant tax assets. Instead, they chose to invest in things like a private rope company in India, which feels like something out of an SNL skit. It's absolutely stunning. Not only did they make these bizarre purchases in distant lands where they lack expertise or tax advantages, but they also essentially funded a newly formed private equity company for the privilege of access.
Their 'investor day' dog and pony show less than 6 months ago should be grounds for a lawsuit. They proudly presented TradeX, which went into receivership less than 60 days later. These individuals made not one, but two investments in that complete write-off. There's a limited peer group that I know of to compare their indian rope company's results to, but the numbers and commentary from yesterday's earnings release and call do not add up. The impact of the disruption in the Red Sea couldn't have been that significant. Something is clearly amiss there. Management was either duped into buying this asset (which is oh so shocking given it was a private company in a country known for rampant fraud), or Aimia just outright lied to shareholders. It's shameful either way.
Lastly, to have paid out Messrs. Mittleman and Lehman for their separations from the company is outrageous. It would have been nice to see them held to account. And it remains shocking that some board members who have signed off on this value destruction over the last two years remain in their board seats.