As an investor I find it pays to remove emotion from purchase decisions. Forget your past sunk costs, what is the current structure and strengths of the business. We live in an era of rapid change and increasing complexity which means incumbency has little value. To win your business needs to constantly innovate. I always look at where the future potential of my current investment looks to be headed.
On this basis WCG is a nimble, marketing focussed business with huge growth potential through acquisitions and cross selling.
It appears Cirrus has done its dash and the future looks grim. Neither scalable nor big enough to win more future business. A merged entity will deliver a synergistic return to holders of either share. If the deal doesn't happen, WCG will probably sell out at a loss before the CNW share price continues to decline.
CNW Price at posting:
3.2¢ Sentiment: Sell Disclosure: Not Held
