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Re: wdy109 post# 30269

Wednesday, 06/21/2017 10:41:01 AM

Wednesday, June 21, 2017 10:41:01 AM

Post# of 346680
Apparently, others agree with you. " but I'm very disappointed that the dividends were what was considered to be "massive news." "

Although we are treating it as wonderful news, and I think it WILL mean more profit for us down the road, it is not what most were expecting. After all, if a company is trading for 100% of its value (regardless of what that "value" is, or if it is undervalued or overvalued. Just an illustration guys.) and you split it, then you are saying you are giving 80% of that value to one side, and 20% tot he other side. It is still worth 100%. NO real gain. UNLESS, and i DO believe this is true here, by being separate the two sides shall grow to a value of 95% on the one side and 40% on the other side. Then you have 135% and you are up. Here's what I mean by that.

If AMFE can grow on its own, and not feel like the play is being diluted by a snowplowing subsidiary (I know. it is more than that. Just saying) then that side may be better off without the other side. As for the other 20%, notice he said he is looking for an acquisition. I think THIS may be the entire reason for the split. Important information hidden in the middle of this post. If he has an idea already of a new acquisition, it may be a riskier deal. New acquisitions normally are. It might be a bonanza, but it could turn into a dud. SO why risk the potential of the entire company on this risk? YOU already have a profitable arm, so split the risky off into another entity, and make the buy. Then, if it goes well, the spinoff does great. If it fails, the spin-off dies, and that no longer affects the larger portion of the company. You have safeguarded the larger part of the company. Make sense? This spin off allows Roger to buy something he apparently already has his eyes on, and yet not risk what has already worked. It IS a good idea, and it IS better for us shareholders, as now we hvae the potential for a second great rise, but without the risk of that second play ruining the first positive business he has built.

To me, that is the reason we did this spin off. A good reason, but different than the reason most are thinking of. Most investors don't think that deep into the reason. I've BEEN a CFO. I've been a CEO. I look at these things with a different eye. And that is my take on the spin off.