Has anyone seen 28 Days Later?I feel like that guy wandering around a completely empty London shouting HELLO!!!<sigh>
Most of the small cap boards on the fool are pretty much dead. Personally, I am looking for an opportunity to sell my JAKK stake at the right price even though I am a LTBHer at heart. I have simply seen management do far too many stupid, greedy things at the shareholders' expense. I am however biding my time because even with the "Friedman discount" I think JAKK is undervalued here.
Hello brewer,I respect your opinions on investment matters. So it troubles me to hear you say that management has done alot of things at the shareholder's expense. Besides the private loans and the stock offerings is there any other things I may have missed?
Well, I finally sold my JAKK position last week at 13, but I will give you the benefit of my experience. Among management's many sins:- Excessive compensation (check out their total comp as a percentage of net income and compare it to HAS or MAT)- Loans to insiders which weren't repaid- Re-pricing management's stock options after the share price fell (i.e. if their exercise price was 20, it was reduced to 10, for example)- Multiple stock offerings and now a convertible bond offering even though there is no reasonable acquisition target in sight- A refusal to break out sales or results in any kind of detail, making it impossible to tell if JAKK is a "leaky bucket" (i.e. existing product lines are declining, but total sales and profits are kept up by constantly buying new lines)- (Probably) misleading the investors in the convertible by pretending everything was fine a few weeks away from the end of the quarter when the bonds were sold, then releasing an earnings report that was (excuse my French) a turd (one analyst on the earnings call actually called it a "train wreck").These are the most egregious transgressions, although there are others. I am a pretty patient investor, so I was willing to see if they could turn things around, but it is clear that mgmt has little interest in doing anything but empire-building and robbing the shareholders blind. I am out with a tiny loss (about $250 on a 1000-share position), and I have learned two valuable lessons: 1) Be very wary of serial acquirers, and 2) pay close attention to mgmt's incentives and character.
Thanks, Brewer, for your comments. I am still holding a similar position to yours, still at break-even after about 2 years. It's pretty frustrating, for all the reasons you mention. Not sure what I'm gonna do...
After the stock dropped into the 10s earlier this year I decided taht I wanted to wash my hands of the mess and get out, but I thought that the drop was overdone. I have a problem with sell discipline (working on that), so I just promised myself that I would dump at 13. Before I went on vacation last week, I just set up a GTC limit order, and it executed. Not a bad way to do it.
Thanks Brewer,I was unaware of some of those things you mentioned. Seems management has their own interests above the shareholders. I knew about the loans and the stock offereings but everything else I was unaware of. Thanks again.Telcomonster
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