TIE & TRID WATCH
TRID is ~16% of our total portfolio and deservces some special focus.
Shorts are going to leave.
At $15, what more is a short hoping to achieve: another $1 down? It re-tested the Augg 14th low of $14 and bounced back. Not much bang for the buck. And at this point, it really isn't going down anymore, especially given their stated growth and cash flow.
In fact, the August short position dropped 6%.
Under accumulation
With their expected growth and the options issue resolved, funds are moving back in. I can't prove this, but I see larger block trades, an indicator of fund interest.
No more surprises
It's all upside from here
No CEO
Why no CEO? Perhaps nobody would touch the company until the options issue got resolved. If so, then expect a CEO to be announced. That would provide a stock price boost.
Alternatively, no CEO may mean a buyout under discussion. For $850M any fund or company can pick up TRID, a company expected to hit $450M in sales in the next 12 months. Cheap even for $1.5B ($21 per share).
I know that I have lost a lot of paper money on this company. I was excited by TRID at $25 and I'm even more ecstatic at $15. Nature abhors a vacuum and undervalued growth companies always correct to being correctly valued. I am going to keep averaging my costs down. The smart play here is to buy calls: $20 january 08s OR $20 April 08s.
TIE
TIE is 10% of our portfolio.
TIE pays $0.86 per share to special shareholders.
To begin with, the only owner of these shares is the CEO's wife. (Some guys buy their wives jewelry, this CEO gives her $1M of the company's money.)
The company has the right to buy these shares at a very low price relative to current value ($50 vs $420). The company SHOULD buy them immediately. Instead, it continues to pay out cash to line the owner's pockets (or his wife's). This has been going on for some time, and the amount has dropped 40% as she converts to actual shares.
Why should she convert? Well, the 0.$86 per share is not a lot relative to price. Holding them is ot going to do much.
Conversely, converting today gets 13 common shares per preferred shares. If the company is bought, they will buy the preferred for $50 (about 1.7 common shares per preferred share).
I am getting bored, sitting around and waiting for these shares to produce.
Shorts are going to leave.
At $15, what more is a short hoping to achieve: another $1 down? It re-tested the Augg 14th low of $14 and bounced back. Not much bang for the buck. And at this point, it really isn't going down anymore, especially given their stated growth and cash flow.
In fact, the August short position dropped 6%.
Under accumulation
With their expected growth and the options issue resolved, funds are moving back in. I can't prove this, but I see larger block trades, an indicator of fund interest.
No more surprises
It's all upside from here
No CEO
Why no CEO? Perhaps nobody would touch the company until the options issue got resolved. If so, then expect a CEO to be announced. That would provide a stock price boost.
Alternatively, no CEO may mean a buyout under discussion. For $850M any fund or company can pick up TRID, a company expected to hit $450M in sales in the next 12 months. Cheap even for $1.5B ($21 per share).
I know that I have lost a lot of paper money on this company. I was excited by TRID at $25 and I'm even more ecstatic at $15. Nature abhors a vacuum and undervalued growth companies always correct to being correctly valued. I am going to keep averaging my costs down. The smart play here is to buy calls: $20 january 08s OR $20 April 08s.
TIE
TIE is 10% of our portfolio.
TIE pays $0.86 per share to special shareholders.
To begin with, the only owner of these shares is the CEO's wife. (Some guys buy their wives jewelry, this CEO gives her $1M of the company's money.)
The company has the right to buy these shares at a very low price relative to current value ($50 vs $420). The company SHOULD buy them immediately. Instead, it continues to pay out cash to line the owner's pockets (or his wife's). This has been going on for some time, and the amount has dropped 40% as she converts to actual shares.
Why should she convert? Well, the 0.$86 per share is not a lot relative to price. Holding them is ot going to do much.
Conversely, converting today gets 13 common shares per preferred shares. If the company is bought, they will buy the preferred for $50 (about 1.7 common shares per preferred share).
I am getting bored, sitting around and waiting for these shares to produce.
posted by Andrew at
3:01 PM
0 Comments:
Post a Comment
Subscribe to Post Comments [Atom]
<< Home