I don't post often. But this thread is hilarious. I think everyone on here needs to take a chill pill. Screaming your opinion at others won't change things. I own a small stake in CI1 and I'm heavily offside as most of you are. There are some good and some bad things about this company.
The good is that it is profitable, and has a low valuation. It is also strongly growing. As many have pointed out, interest rates are going up. This might bring in a bit more business through the economic churn. However the economy is very strong, so I wouldn't be expecting anything dramatic in terms growth in demand.
The negative is that the company is tightly held by one family. This is not always a bad thing, but in this case it could be. The remuneration that is being drawn by the key people is very large considering the size of the company. If remuneration for one person is $2 million dollars and the market cap is $10 million, well that will ring alarm bells for many people. It just looks bad. It could appear that the key people are just going to extract all the profit for themselves in whatever way they can, and then stick their hand out and ask for more money i the form of a capital raise to fund growth. Generally it should ring alarm bells when big percentage owners are paying themselves a big salary like this in such a small company. It could point to them putting their own personal success before the company. And with a very short term focus I might add.
To put it into context, NAB released a very good result today. Their CEO is taking home $1.87m in cash. Less than the CEO of CI1. If investors extrapolate out this salary as a sign of things to come from CI1, then of course they will run for the hills, as no matter how profitable the company, the CEO can just extract all money for himself.
This is compounded by the extremely low market float of the company. Most of the ownership is tied up in the majority holders, so the amount actively traded every day is small, and this leads to liquidity problems. This is also why we will probably never see institutional investors in this company. There is too much liquidity risk. Even if they like the business, they have to be willing to take a 100% loss if something goes wrong. So forget about institutions stepping in anytime soon.
The solution?
If the business continues to grow and become more profitable, we need to see the directors leave money in the business for expansion instead of paying it to themselves. This is what will lead to investor confidence. It is as simple as that. A share buyback as suggested by many here is a terrible idea. This is a small business in a growth phase. They should be spending money on expansion, not buying back shares. For me personally, I will be watching for signs that recent levels of profit are continuing, and that the CEO salary does not increase.
In terms of the CEO fighting with shareholders, it certainly doesn't look good for him. It makes him look quite childish in my opinion. Taking down his linkedin was probably a good move.
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