Sure, but you can't blame people who look at their $100K invested and wonder why it is not the $200K they feel it should be. I don't see anything wrong with people agitating for a better a return on their hard earned. I don't see a problem with them exercising their right to question.
I have no issue with people agitating for management to work harder to get a better return on their investment. The only issue I have is the lack of content in their whinging. The lack of content makes it a whinge, not a logical argument.
If you plan on buying a company that you think is undervalued and you expect the market to quickly agree with your valuation at your chosen time point in time, then you are DREAMING.
The company's strategy is clear. Why the SP was going up or down at the time - who the heck knows?
What I do know is that the $300USD offer valued AZZ at around 75-80 cents. The board ended up getting enough information from both their own work and the work of our neighbours to lead them to believe that this was a lowball offer that did not represent the best value so they canned the deal, rather than selling us all short.
A bunch of people whinged and cried that they couldn't get their 100k to turn to 200k RIGHT NOW. The SP went backwards dropping to below 40 cents.
In a nutshell, we had an offer that valued the company at around 75-80 cents, the board dumped the offer because they felt it was worth significantly more, analysts from a range of different brokers concurred, with some putting its value at well over $1. There was also other corporate activities with other companies that held oil assets in Texas around the same time that also suggested the same thing.
Yet despite this, people were outraged that the board didn't sell it for substantially less than what they an a lot of others thought was fair value. So 'the market' then sold it down less than 40 cents. Yes, we all had the opportunity to increase our position at less than 40 cents. I hope you all took up the same opportunity as I did.
After the company had abandoned the $300m USD deal, the company reported in its last quarterly that there was "4. Significant Corporate interest in Permian Assets – Ongoing Meetings". IMO, no one would bothered expressing interest in AZZ’s assets if they also did not suspect that it was worth substantially more than $300m USD, because the board had already made it clear that $300m USD was not acceptable.
Unfortunately the Lone Star circus has led some company to think that if Lone Star are complaining about the board abandoning the $300m USD deal, that they might be able can use this opportunity push through another lowball opportunity while they're too busy fighting a minority shareholder.
And before you give all the credit to the Lone Star circus as being the sole reason why the most recent offer has arisen, remember the company had already reported that there was interest in their Permian assets before the circus came to town.
Yes, I agree that the communication from management is poor. Yes, I wanted more information when they abandoned the initial $300m USD deal. But am I happy to just hand over control of the company to someone who doesn't present a clear alternative and initiates their engagement by starting a media circus? No.
AZZ Price at posting:
62.5¢ Sentiment: Hold Disclosure: Held
