tag:blogger.com,1999:blog-7294165939647321702.post436973765945269337..comments2024-03-28T13:45:43.362-04:00Comments on <center><a href="http://www.barelkarsan.com">Barel Karsan - Value Investing</a></center>: Meade's Discount InstrumentalSaj Karsanhttp://www.blogger.com/profile/04493152766022812984noreply@blogger.comBlogger9125tag:blogger.com,1999:blog-7294165939647321702.post-87877688052830730472012-02-16T09:52:31.870-05:002012-02-16T09:52:31.870-05:00Saj,
Thanks for the reply and great job on the bl...Saj,<br /><br />Thanks for the reply and great job on the blog. I'm fairly new at analyzing financials so when I come across something like that I am not always sure how to delve deeper and figure out whether I am reading something incorrectly or not. If you have any advice on resources that could help address similar issues I would appreciate the help. If you investigate it further please let me know what you find.<br /><br />TimTWD909https://www.blogger.com/profile/15573892410287628449noreply@blogger.comtag:blogger.com,1999:blog-7294165939647321702.post-3736435111390874992012-02-15T21:05:22.956-05:002012-02-15T21:05:22.956-05:00Hi Tim,
My reading of that statement suggested th...Hi Tim,<br /><br />My reading of that statement suggested there was a penalty for the company to pay if the investors group is not able to legally sell its shares. Since it has been several years and the issue hasn't come up, I had ignored it, but you could be right that this represents an unaccounted for liability.Saj Karsanhttps://www.blogger.com/profile/04493152766022812984noreply@blogger.comtag:blogger.com,1999:blog-7294165939647321702.post-27177789184735484132012-02-14T00:20:36.371-05:002012-02-14T00:20:36.371-05:00Hey Saj,
I came across something in Mead's fi...Hey Saj,<br /><br />I came across something in Mead's financials that I am unclear on. Specifically in regard to their PIPE funding and whether or not they satisfied the liquidated damages clause of 1.5% per month on 6 million in the registration statement. I'm not sure whether I am being paranoid but as the group of investors has subsequently replaced management and seems to control the board it does seem possible to me that this is a potential value play for Hummingbird and other investors involved (also share prices plummeted shortly after the offering prior to the reverse split). I'm unfamiliar with how any liquidated damages would be reflected in the financial statements. Please see quote taken from the definitive proxy statement and let me know what you think.<br /><br />On August 24, 2007 (the “Closing Date”), the Company entered into a Purchase Agreement (the “Purchase Agreement”) with five institutional investors (the “Investors”) pursuant to which the Investors purchased in a private placement 3,157,895 shares of the Company’s common stock, par value $0.01 (the “Common Shares”) (or 157,895 Common Shares as adjusted to reflect the Reverse Stock Split), at a purchase price of $1.90 per share (or $38.00 per share as adjusted to reflect the Reverse Stock Split). Gross proceeds from the sale of the Common Shares were approximately $6.1 million. Three of the Investors (the “Hummingbird Investors”) are controlled by a director of the Company, Paul D. Sonkin, through his management and control of Hummingbird Capital, LLC, the general partner of the Hummingbird Investors. The Hummingbird Investors purchased in the aggregate 526,316 of the Common Shares (or 26,316 Common Shares as adjusted to reflect the Reverse Stock Split) and paid a purchase price of $2.00 per share (or $40.00 per share as adjusted to reflect the Reverse Stock Split) (or an aggregate purchase price of approximately $1.1 million) in accordance with applicable rules of the NASDAQ Stock Market. The approximate dollar value of the amount of Mr. Sonkin’s interest in the transaction is $45,000. Prior to the sale of the Common Shares to the Hummingbird Investors, Mr. Sonkin beneficially owned approximately 15.6% of the Company’s common stock.<br />In connection with entering into the Purchase Agreement on August 24, 2007, the Company also entered into a Registration Rights Agreement with the Investors (the “Registration Rights Agreement”). Pursuant to the Registration Rights Agreement a registration statement was filed with the Securities and Exchange Commission (the “Commission”) and declared effective covering the resale of the Common Shares. Subject to certain exceptions if sales cannot be made pursuant to the registration statement, the Company must pay the Investors 1.5% of the aggregate purchase price of the Common Shares for each 30-day period (or portion thereof) during which sales under the registration statement are not permitted. <br /><br />TimAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-7294165939647321702.post-40823333561423783412011-06-09T14:03:54.527-04:002011-06-09T14:03:54.527-04:00Hi Greg,
1) Seasonality does not bother me, no
2)...Hi Greg,<br /><br />1) Seasonality does not bother me, no<br />2) Agreed, but its not overly ridiculous reliance by any stretch<br />3) Exposed to temporary drops in revenue and losses yes, but in terms of financial position they are set up to outlast any downturnSaj Karsanhttps://www.blogger.com/profile/04493152766022812984noreply@blogger.comtag:blogger.com,1999:blog-7294165939647321702.post-68445332367694402102011-06-09T13:31:56.886-04:002011-06-09T13:31:56.886-04:00Some thoughts and questions:
1) Their results are...Some thoughts and questions:<br /><br />1) Their results are highly seasonal and they discuss this, does that bother you in when you take your position and how you value them?<br /><br />2) They have large reliance on their existing customer set.<br /><br />3) The discretionary nature of their product leaves them really exposed in the event of a downturn.<br /><br />4) .3 mil/year and .3 mil /year on their office and factory, is .6 mil a year in lease commitments.Gregnoreply@blogger.comtag:blogger.com,1999:blog-7294165939647321702.post-49447316261379863312011-06-04T00:41:39.156-04:002011-06-04T00:41:39.156-04:00MEADE also has about $100 million of state and fed...MEADE also has about $100 million of state and federal NOL's (almost 20x the market cap), which could be very beneficial should the turnaround be successful.Taylornoreply@blogger.comtag:blogger.com,1999:blog-7294165939647321702.post-50671116905204444182011-06-03T19:40:23.829-04:002011-06-03T19:40:23.829-04:00Hi Anon,
Floris is right; it made money in the 4t...Hi Anon,<br /><br />Floris is right; it made money in the 4th quarter. Also, it is dealing with some legacy stock compensation expenses which are pushing down income artificially. I agree the price rise lowers its attractiveness though.Saj Karsanhttps://www.blogger.com/profile/04493152766022812984noreply@blogger.comtag:blogger.com,1999:blog-7294165939647321702.post-77209600860516272092011-06-03T15:25:27.639-04:002011-06-03T15:25:27.639-04:00I dont think it actually lost money during the las...I dont think it actually lost money during the last quarter of its fiscal year, which should be logical considering the restructuring and the improving sales are working through the P&L.Florisnoreply@blogger.comtag:blogger.com,1999:blog-7294165939647321702.post-68018601782171658202011-06-03T12:06:29.238-04:002011-06-03T12:06:29.238-04:00The company is still losing money though, how do y...The company is still losing money though, how do you expect this to change? No div payments or share buybacks... and took a pop in price today. Not sure this is such a good long at these prices.Anonymousnoreply@blogger.com