Braintot Take $900M Turnover, adjust fixed costs , and a fool...

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Melrosian

2,018 Posts.

07/02/17

11:28

Post #: 22421936
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Originally posted by Braintot ↑

I can see how the Jims of the HC world are a "little upset".

I think the main beef is not the acquisition but the price.

It does beggar belief how they offered so much. If they'd settled on say $350 Million it could have been largely covered by a CR and it would have been plain sailing with little debt from then on. If they'd waited 6 months, maybe they could have snapped it up for $200 M or less.

On the other hand if they had done the smart thing SGH may never have come to the attention of many of the current holders but that's cold comfort for the previous loyal supporters who were clearly let down.

That still does not mean that MB will prevail, just that there is a case to answer. I hope MB gets hammered for its cannibalistic avarice and applaud those who recognise that they were masters of their own fate with this stock and have either moved on or put their shares away and are toughing it out.

That said, if you are a LT holder you don't want to be watching too closely the daily or even monthly fluctuations of SP and it's easy to see how the price could sink a long way before you twigged that something was a bit rotten in the state of Denmark.

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Braintot

Take $900M Turnover, adjust fixed costs , and a fool could derive a profit. Normal would be 12-17% NPBIT....
which is 9 figure profits before tax and interest. Good interest cover. I expect operational $50 M cash flow + one offs of C $100 M or more.

In my book , with a forward PE of 1 or less, The rotten bit is the overmanipulation of the SP.

Mel

SGH Price at posting: 25.5¢ Sentiment: Hold Disclosure: Held
10 Upvote

0 Great analysis

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