Attitudes sure changed around here. Perhaps it's time to take a look a Noble Roman's post here that I'm responding too. Perhaps some apologies are in order. Who would like to go first. To recap a few things he said:
1. You really don't know what's happening. The letter is fresh, and he wasn't able to talk to Banderas and Pappas according to his letter. We don't know if they are in discussions now or not.
2. It's not possible to conclude if Pappas and Banderas bought in or IFFF Denver Smith proposed it. But with Denver's allies and his recent buying, Pappas and Banderas, it doesn't take a big percentage of the retail investors to get in board. And the onlne consensus there is pretty clear. There is that path.
3. It's not that logical to conclude they see no way out of the mess. Banderas put up $3M of his own money last year. That's not very long ago and the landscape hasn't changed. Whatever he saw then, he sees now. And #2 is another fork in the road and way out. If they don't take it, that too is most likely bullish. Or, it means they were duped. Which I dn't find logical, but it may be a good coping mechanism for others that may have been duped. The more logical thing to concluce is that these high IQ's that may or may not be on the same page as Sam now -- or Sam on board with them now -- is that an intelligent plan fails. And that's called risk. And the floor is not that far below. It's only 20 cents. Unless someone were to have all their eggs in this basket, no reason to panic as the nervous nellies around here 24/7.
4. The fact that the stock doesn't trade high enough means they have no liquidity, as I noted. And that they are underwater, as I noted. So, they are stuck. That's bullish to me. A fire under their rears and a short runway without taking on more debt or more dilution at their own expense. It's called having Mr. Market in a headlock.
5. It's not obvious what, if anything, Denber presented or whether or not the board supported it or an agreement was reached. There will be a plan. There always is. And the fact that there is no way out for them but crash, burn, or fly, is good enough for me.
So, simple logic alone rules the day. Overthinking, as usual, kept people from buying below .20. You can lead a mule to water...
Let's take a look at this letter today from the new CEO. Didn't even have to spill blood to get a new CEO. Oh, what was that earlier about the former CEO would never step down. Oh, he had a secret weapon up his sleeve. Was that right?
You know, I read this letter, and I just know he gets it.
I think it's safe to conclude that nobody would step down from a $10-billion dollar division in a much more stable company to a company with a $17-million market cap on shaky ground. Unless they are a High School Track star on the Varsity team and asked to join the little league team with the condition that if they take them to State, you get Olympic sized income and sponsorship.
"Most recently, I led eCommerce for The Kroger Co., responsible for Kroger’s $10 billion eCommerce business. "
Since the former only used to happen in my dreams, I think it's safe to conclude that dreams do happen on Wall Street.
My current 14.7% paper return is chump change. Not acceptable for this risk/return/duration. I'm looking forward to 140% return here. I think it's quite doable. Actually, to be honest, 400% is quite doable. 140% is also chump change.
Truth!
