Post by
BlueHorseshoe13 on Dec 27, 2015 5:05pm
Thinking Thryu the link to Ryu
Great to see more activity on this board lately.
So, I was stunned (as I’m sure others were) to see that the new management team has a pretty material link to Andrew Ryu. As I understand it Ryu basically took over Cozumo, which is some kind of fin tech start aimed at retailers.
Ryu, a 9% shareholder in LRN, is now at the head of Cozumo, and MacGregor, former employee of Cozumo, is now at the head of LRN.
I think the following must be true:
1) This cannot be coincidental
2) The board, lenders, and significant shareholders were all briefed on this relationship and, whatever the rationale, liked it and approved of it
3) The total story, including this new connection to Ryu, contributed to allowing the company to raise more cash, stay solvent and escape defeat (to be confirmed)
You could make the argument that both of these transitions are made easier as the new CEOs are able to coach one another. But efficiency wouldn’t be enough to mask the stink of this spring’s collapse.
I would say that if the pref offering of $3M and the associated debt restructuring does come through, the grand strategy is something like this.
MacGregor is being brought in to stay on top of ops, manage costs, and to use Ryu’s relationships and fundamental understanding of the ESL markets to protect and build the top line. To buy this strategy you have to believe for a minute that managers (and people in general) aren’t the averages of the good and bad, but rather both of those contemporaneously. And I wont beat the dead horse that is the previous management’s failure to contain costs, BUT… it’s still hard to deny their vision and execution in building an ESL business through acquisitions. AND… maybe it’s not crazy to think that Ryu could help a new CEO do exactly that again in 2016. Given MacGregor likely has a piece of Cozumo, they’ll have to be careful to do things by the book. But as far as I can tell, this relationship would be permissible.
It’s a stretch, and likely an unpopular view, but I really don’t know how else to piece this together.
I don’t agree with the view the Ryu and MacGregor are working together to pump and dump this, to use the proceeds to pay down the debt, and then to somehow screw the balance of shareholders. It doesn’t make sense on any level really (numbers, mechanics, etc.).
I absolutely do acknowledge that there IS a chance that none of this will work and LRN will go to zero, and sincerely sympathize with those who were burnt in the past. But at these prices it is a very interesting story.