tag:blogger.com,1999:blog-2149523431587168680.post373232974761560324..comments2024-01-16T00:12:23.220-05:00Comments on Oddball Stocks: A Fortune to be made, a chance to participate in a LBONate Tobikhttp://www.blogger.com/profile/05660387777171986124noreply@blogger.comBlogger31125tag:blogger.com,1999:blog-2149523431587168680.post-70979476030494203132013-08-07T23:40:44.624-04:002013-08-07T23:40:44.624-04:00Anyone who invested after march 2012 have any insi...Anyone who invested after march 2012 have any insight on this. Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2149523431587168680.post-77479958851885050732013-07-09T22:31:18.981-04:002013-07-09T22:31:18.981-04:00I did...see my blog from a couple of days ago...I ...I did...see my blog from a couple of days ago...I have never seen such abuse of power and neglect for the shareholders...they left millions on the table from another offer and kept the shareholders in teh dark.srs3720https://www.blogger.com/profile/02467623714150867000noreply@blogger.comtag:blogger.com,1999:blog-2149523431587168680.post-86489920542116251672013-07-09T22:28:40.096-04:002013-07-09T22:28:40.096-04:00Check my blog below....have been paying a lot of a...Check my blog below....have been paying a lot of attention to the acquisition and its players. Stockholders should be very upset as they got screwed!srs3720https://www.blogger.com/profile/02467623714150867000noreply@blogger.comtag:blogger.com,1999:blog-2149523431587168680.post-13284682440617461802013-07-08T09:04:59.971-04:002013-07-08T09:04:59.971-04:00I have enjoyed reading you posts. I went looking ...I have enjoyed reading you posts. I went looking when the acquisition took place. I became involved when I brought another buyer to the table with a far superior offer. After a conference call with inside and outside attorney reps and directors, they decided to not put it in front of the shareholders. I later came to know that the outside attorney who is responsible for representing the directors, told them the money was not guaranteed. In fact it was as he knew from having the equity investor and officers for buyers on the phone. After the call, my buyers even upped the cash amount on the table by $1.5 m. One of the directors tried to rescind his signature on the closing documents after discovering some inaccuracies in the information given to him from the attorney, accountant, and in-house attorney. There is a $500K to the outside attorney and $280K as a consulting fee in the proxy...anyone know who gets that? By my discovery, appears it goes to the CPA. Both fees were to be paid at time of closing. Our offer did not include any loan from FFI and had more cash on the table, along with a higher common stock payout as well as the preferreds. someone called it "theft" in a previous post....couldn't be more true. I contacted an attorney, as did the director. The attorney was shocked at the fees involved and the information not disclosed. There could be a malpractice suit there too. srs3720https://www.blogger.com/profile/02467623714150867000noreply@blogger.comtag:blogger.com,1999:blog-2149523431587168680.post-88368990148901614782013-03-18T14:24:24.807-04:002013-03-18T14:24:24.807-04:00I have been trading FFI for a while now. I got ale...I have been trading FFI for a while now. I got alerted well before the volume started to pick up by the Chief and because of this I was able to score a nice profit a few times. The report helped me get a better understanding of the stock and its trends. It’s always best to know and understand the stock before you buy. Check it out at pennystockchief.com/ticker.php?ticker=FFI (Kindly, copy and paste the link in to your browser.)Tauqeer Ahmedhttps://www.blogger.com/profile/09763458567087356361noreply@blogger.comtag:blogger.com,1999:blog-2149523431587168680.post-14466059089869873932013-01-29T15:35:11.515-05:002013-01-29T15:35:11.515-05:00JJR,
I know this is an old post, but did you eve...JJR, <br /><br />I know this is an old post, but did you ever contact a lawyer? This looks like out and out theft to me.Kevinnoreply@blogger.comtag:blogger.com,1999:blog-2149523431587168680.post-76940888133359441852012-09-20T14:41:34.256-04:002012-09-20T14:41:34.256-04:00Hi Nate,
Looks like Carter died and now they have...Hi Nate,<br /><br />Looks like Carter died and now they have some sort of merger going on. Any thoughts? I did not get cashed out yet. Did you?<br /><br />Thanks!Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2149523431587168680.post-17316591331193072262012-07-24T17:18:14.151-04:002012-07-24T17:18:14.151-04:00I called the company three time yesterday and left...I called the company three time yesterday and left messages with three different officers. In the first call back I asked about any small holders being taken out of the stock when purchasing after the March date. The corporate attorney said you had to own the shares on March 26 "and" when the deal goes through. <br /><br /><br />On the second call, I expanded our conversation with respect to corporate governance. I wanted the Kraft FFI 'fairness opinion' sent to me. She was reluctant to do so, but I mentioned I'm a shareholder and I wanted the complete version with charts, comps, and graphs, not the proxy's condensed version. She wasn't sure if she could send it, but I told her the proxy says she can, so to please send it. One of the items I wanted to see was the treatment of their DTA's. There is a valuation allowance on these, but they are real and significant assets nonetheless. I wanted to see how they were valued and what management thought of future prospects.<br /><br /><br /><br /><br />I told her I wasn't clear on why the 'company' couldn't do this transaction vs. using a merger vehicle created by management? Large shareholders have been severely diluted. Great transaction in taking out the preferred, but couldn't this have been done in a more shareholder-friendly manner? The company gets the liabilities, but insiders get the shares. The CEO/CFO percentage of ownership went from 1% to 71%, while large holders were diluted from 39.1% to 8.6%. Incredible, where were the independent board members? <br /><br />She mentioned something about the current lawsuit, so couldn't talk about it, but I told her that was totally different situation. The plaintiffs in that case felt 61 cents was a ripoff. In this case, large shareholders are looking at 14 cents!<br /><br />I told her the preferred take out was a great move for the company, but when looking at the post merger results, no benefit accrued to the large unaffiliated shareholders. In fact, what senior management gained, large shareholders lost!<br /><br />She said the company was shopped and nothing came of it, so this was the best deal available. I said if the ultimate liability of the new debt resides with the company anyway, why didn't the 'company' do the transaction vs. the MBO sub. I'm certainly not opposed to the CEO/CFO gaining greater ownership post transaction but what they are actually risking should be commensurate with their potential reward. <br /><br />She had to talk to a committee of folks and get back to me in a couple of days. If the answer is not reasonable (and I have my doubts it will be), I will contact the lawyer that got shareholders a nice settlement with the thieves at Coast Dental (CDEN). This is a relatively small amount of money (a couple of million is being transferred from one pocket to another), but I got the impression those lawyers were that rare breed that actually believed in what they are doing. This case also strikes me as egregious management behavior, so they may take it on principle (and it doesn't look hard to win).JJRnoreply@blogger.comtag:blogger.com,1999:blog-2149523431587168680.post-64357811678687988072012-07-22T12:25:30.650-04:002012-07-22T12:25:30.650-04:00Now what happened to the unaffiliated shareholders...Now what happened to the unaffiliated shareholders’ ownership percentage with these new common shares going to the CEO and CFO? Well their ownership was diluted from 39.1% to 8.6%, which coincidentally is the same percentage loss in value from 61 cents to today's 14 cents a share. <br /><br /><br />Will CEP (the parent company) be on the hook for the loan and note? If the value of the Preferred purchase is mostly accruing to these 2 insiders, shouldn't the cost of it reside with them as well? Will the loans reside at the parent holdco level where they belong or will they be a liability of the company (the owned sub)?<br /><br /><br />"Upon the consummation of the Merger, the obligations of Parent under the senior credit facility and the subordinated loan from the Company’s majority shareholder will become obligations of the surviving corporation."<br /><br /><br />To add insult to injury, if you look at the fees of this transaction (about a half mil), they were all pretty much borne by the company and the little that was not ($50K), looks reimbursable after the merger. So the non-affiliated shareholders are not only getting screwed but paying for that privilege.<br /><br /><br />I'm not a shareholder in this company (yet), but if I was, I'd ask management a few questions. If the liability ultimately resides with the company, why didn't the company do the same transaction as CEP (minus the dilution)? Now I know this would have required someone caring about non-insider shareholders, but isn't that what a board is supposed to do? How could they say with a straight face this is good for non-affiliated large holders? I'm all for aligning senior management interests with shareholders, but that doesn't mean going from one parasitic structure (the Pfd's) to another (huge transfer of value to management.)<br /><br /><br />At the very least, larger non-affiliated shareholders should have been taken out at the same price as smaller ones. <br /><br /><br />These MBO's can be profitable for johnny-come-lately's like me. Management is shrewd. I really like that they are taking out the pfd, but don't like how they abused shareholders in the process. I think I will give them a call to see what they have to say. I'd also like to know what happens to their significant NOL's with the proposed 70% change in ownership. <br /><br /><br />Nate, the book value will change with purchase accounting. Intangibles will likely be written down to zero, so it's negative book, but this is going to be a deleveraging, earnings story going forward, not an asset play.JJRnoreply@blogger.comtag:blogger.com,1999:blog-2149523431587168680.post-52368720766663242282012-07-22T12:24:06.625-04:002012-07-22T12:24:06.625-04:00Nate, not so sure ambulance chasers don't have...Nate, not so sure ambulance chasers don't have a legitimate case here. I know if I was an unaffiliated large-block shareholder, I would not be happy. Small shareholders (500 or less) are being taken out at a fair price, but non-insider shareholders are getting a raw deal.<br /><br /><br />Mr. Fortune's bad luck has put him in the unenviable position of negotiating from a point of weakness, but in his case, he willingly took what was offered him. Unaffiliated shareholders did not share the same benefit in either accepting or rejecting an offer. There was nobody representing their interests at the table. <br /><br /><br />Now the deal the CEO and CFO struck with Mr.Fortune was a very good one for the company. The Pfd valuation report stated it was worth $21.3M and that was a very fair price. So Mr. Fortune is being paid $12.3M (cash and note) for his ownership of the Pfd and his common holdings post merger are also further reduced from 60% to 20%. Three cheers for opportunistic management in taking advantage of the situation to get rid of these onerous Pfd's!<br /><br /><br />Unfortunately, the opportunity to take advantage didn't stop there. The CEO and CFO own a measly 1% of the stock, but post transaction, they will own a whopping 71%. What exactly are they putting up to increase their stake by such a large amount? Well, they are putting their token amount of shares into CEP (the parent company) and they each put up personal guarantees of $750K for the loan. Their stock is worth less that $20K and their personal guarantees are very unlikely to ever get called because the company’s accounts receivable, property, and other assets will be used as collateral for the $6M in borrowings.JJRnoreply@blogger.comtag:blogger.com,1999:blog-2149523431587168680.post-46233833832678477582012-07-19T12:48:42.106-04:002012-07-19T12:48:42.106-04:00Adib,
I find them anywhere and everywhere! I'...Adib,<br /><br />I find them anywhere and everywhere! I'm actually amazed myself at the constant stream of stuff I can find.<br /><br />The uncertainty is like you say the time table, and the agreement. There was some language that said June 30th was a possible close date, but if that failed it would be Dec 31st. Seeing as how we passed the 30th without anything I'd assume we've moved to the 31st.<br /><br />The second is who gets cashed out, there's some ambiguity around it. It is possible to read it as only holders on March 26th get the shares. But it's possible it could be all odd lot holders too. I took a gamble, it's only $80 so if it works out I'm happy, if not I'll probably lose $10-20 selling after the merger closes.<br /><br />The shares can be in street name, the documents mention beneficial holder which means street name holders.Nate Tobikhttps://www.blogger.com/profile/05660387777171986124noreply@blogger.comtag:blogger.com,1999:blog-2149523431587168680.post-68237030770988582092012-07-19T12:36:59.766-04:002012-07-19T12:36:59.766-04:00I dont know where you find these ideas Nate :)
Is...I dont know where you find these ideas Nate :)<br /><br />Is there a time table for when the tender goes through? Risk reward is interesting. THe only concerns are did you need to own shares as of the March 2012 agreement and do you need to own it in your own name.adib motiwalanoreply@blogger.comtag:blogger.com,1999:blog-2149523431587168680.post-63856256211668843152012-07-12T07:34:23.975-04:002012-07-12T07:34:23.975-04:00Anon,
Correct about DTC, but it really depends. ...Anon,<br /><br />Correct about DTC, but it really depends. Some of these reverse mergers have language that say beneficial holders (street name included) and others say only holders of record (actual shares). For FFI it says beneficial so street name would be included.<br /><br />I've seen with some companies that go dark they will publish the number of shareholders. I saw one recently that had 120 record holders and 50 beneficial holders, so well below the 300 count. It just depends on how close to the line management wants to play. The 300 is ambiguous and leaving all beneficial holders could result in over 300 actual beneficial shareholders but less than 300 record shareholders. The risk the company runs is that the SEC cracks down on this and reverses the going dark. This isn't going to happen, with the JOBS act the number of shareholders to go dark was increased to 1500. I think we're going to see a lot more of these transactions soon.Nate Tobikhttps://www.blogger.com/profile/05660387777171986124noreply@blogger.comtag:blogger.com,1999:blog-2149523431587168680.post-4780375444328151962012-07-12T00:37:21.508-04:002012-07-12T00:37:21.508-04:00Nate, keep in mind that the DTC holds as a nominee...Nate, keep in mind that the DTC holds as a nominee all shares held in brokerages in street name in a single account called Cede & Co, and as a result the number of street name holders is actually irrelevant because all street name holders are counted only as a single shareholder (DTC: Cede & Co.) in the transfer agents records.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2149523431587168680.post-76468644747309525782012-07-12T00:05:40.049-04:002012-07-12T00:05:40.049-04:00ABV, the term "beneficial owner" signifi...ABV, the term "beneficial owner" signifies street name holders, so whether or not a holder owned certificates or through a nominee, such as a broker, won't matter.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2149523431587168680.post-75003699130406366522012-07-11T22:24:27.489-04:002012-07-11T22:24:27.489-04:00Got to agree with Nate and Jim. I took the plunge ...Got to agree with Nate and Jim. I took the plunge for 80 bucks too. Since they haven't given the effective date of the Merger I don't think it makes sense for them to exclude the small block holders. I wonder if having the shares in Street name will matter? Either way how are they going to ensure under 300 shareholders without giving all shareholders under 500 shares the money. Of course if there are too many of those shareholders it could kill the deal..ABVhttp://www.abitofvalue.comnoreply@blogger.comtag:blogger.com,1999:blog-2149523431587168680.post-56239652504815246692012-07-11T11:37:25.205-04:002012-07-11T11:37:25.205-04:00Nate,
To add to the confusion, Schedule 13E3 file...Nate,<br /><br />To add to the confusion, Schedule 13E3 filed on 2012-5-29 states the following...<br /><br />"Upon the completion of the merger, each outstanding share of Common Stock owned by beneficial or record holders of less than 501 Shares on March 26, 2012 and who continue to own those shares of Common Stock on the effective date of the Merger (the “Small Block Holders”) will be converted into the right to receive $0.61 in cash, without interest and less any applicable withholding taxes. Upon the completion of the merger, each outstanding share of Common Stock owned by beneficial or record holders of 501 or more Shares: (i) on March 26, 2012 or (ii) on the effective date of the merger (the “Large Block Holders”) will continue to own the Common Stock of the Company which they currently own, which will be deemed to be shares of the surviving corporation’s common stock. The Rollover Shareholders have agreed to contribute, immediately prior to the completion of the merger, in the aggregate, 7,424,687 shares of Company common stock to Parent in exchange for shares of Parent common stock." <br /><br />It looks to me like you have to have owned the shares as of March 26th to participate??<br /><br />However, as you point out for 90 bucks it may be worth doing just for the experience!<br /><br />JimAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-2149523431587168680.post-86749498682553453912012-07-10T23:01:25.523-04:002012-07-10T23:01:25.523-04:00Sorry for the lack of clarification on this questi...Sorry for the lack of clarification on this question, see the comment below this on plausibility. At the current price 500 shares is $87, it's worth the gamble in my mind. Worst case the stock suddenly goes to 0 on merger + one day and I lose $87, not a big deal. More likely the price will be close and I'll maybe lose $10 or so. If I'm always desperate I can sell at $.08 and I'm sure someone will gladly pick up my shares.Nate Tobikhttps://www.blogger.com/profile/05660387777171986124noreply@blogger.comtag:blogger.com,1999:blog-2149523431587168680.post-59823059102385463882012-07-10T22:59:31.623-04:002012-07-10T22:59:31.623-04:00I took the gamble, I figure at worst I somehow los...I took the gamble, I figure at worst I somehow lose my entire $80, but more likely I can sell at close to this price and maybe only lose $5-10. I'm willing to risk lunch at McDonalds for the potential of a few hundred dollars.<br /><br />When I think about this I can't see how the company can ensure that they actually have less than 300 shareholders if they use the merger date. Unless they think people will sell and no new buyers will emerge. I wonder how many people bought his tender without reading closely, maybe a few dozen, or maybe a few hundred. That could really change the outcome.<br /><br />I should try and contact the company for clarification and see what they say. There's a potential that their deal is disrupted if they stick to the Merger date.Nate Tobikhttps://www.blogger.com/profile/05660387777171986124noreply@blogger.comtag:blogger.com,1999:blog-2149523431587168680.post-57195945936612204942012-07-10T22:52:46.913-04:002012-07-10T22:52:46.913-04:00While it may be FFI's intent that qualificatio...While it may be FFI's intent that qualification for cash consideration be based upon ownership "on the date of the Merger Agreement and until immediately prior to the Effective Time," I'm wondering if the company can actually enforce these criteria. It seems to be unorthodox to say the least that the company is attempting to use two dates instead of one for determining how "small block" shareholders will be treated. I cannot remember a case where more than one date was used with any company making any determination about shareholders qualifying for anything.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2149523431587168680.post-29578165517639918272012-07-10T22:09:12.679-04:002012-07-10T22:09:12.679-04:00Well, I guess we now know why the "premium&qu...Well, I guess we now know why the "premium" is so large....Taylornoreply@blogger.comtag:blogger.com,1999:blog-2149523431587168680.post-9648084645167576512012-07-10T20:35:49.507-04:002012-07-10T20:35:49.507-04:00From p. 42 of FFI's recently filed PRE 14A for...From p. 42 of FFI's recently filed PRE 14A for a merger agreement:<br /><br />As to each Shareholder who is a Small Block Holder on the date of the Merger Agreement and until immediately prior to the Effective Time (including any heir or devisee of such record or beneficial holder holding such shares pursuant to the laws of descent and distribution in that record holder’s domicile), such Small Block Holder’s shares of Company Common Stock issued and outstanding immediately prior to the Effective Time (other than any Dissenting Shares) will be canceled and extinguished and automatically converted into the right to receive Sixty-One Hundredths Dollar ($0.61) per share.<br /> <br />As to (1) each record holder of Company Common Stock that is not a record or beneficial holder on the date of the Merger Agreement and until immediately prior to the Effective Time and as to (2) each Large Block Holder, each such holder’s shares issued and outstanding immediately prior to the Effective Time shall continue to be issued and outstanding shares of the Company, which will be the surviving corporation of the merger.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2149523431587168680.post-14310058367102066532012-07-08T22:31:41.972-04:002012-07-08T22:31:41.972-04:00I was about to ask the same question. The filing e...I was about to ask the same question. The filing even underlines the word "and". I interpreted this to mean that you had to own stock on the date of the merger agreement to participate in the odd lot tender.Taylornoreply@blogger.comtag:blogger.com,1999:blog-2149523431587168680.post-22878660001676714412012-07-08T18:46:28.641-04:002012-07-08T18:46:28.641-04:00Nate - doesn't the first condition require you...Nate - doesn't the first condition require you to hold the stock on the agreement date and through to the closing?<br /><br />" As to each record holder of the Company’s Common Stock, $0.10 par value (“Company Common Stock”) holding less than five hundred one (501) shares thereof on the date of this Agreement and until immediately prior to the Effective Time...."<br /><br />Does this mean a new shareholder can not buy shares today?abvnoreply@blogger.comtag:blogger.com,1999:blog-2149523431587168680.post-74760428194727683542012-07-06T10:44:33.024-04:002012-07-06T10:44:33.024-04:00Hmmm, earnings went positive and FCF increased st...Hmmm, earnings went positive and FCF increased starting 2009 / 2010. Sounds like a good move with the new CEO.Anonymousnoreply@blogger.com