Thoughts on XIDEQ
New to the Board, but I've been following (and unfortunately own) this company for a while. I've been a financial analyst professionally for a long time. I'm not an expert in bankruptcy situations, but have learned a lot over the past several months having been successful in AAMRQ and unsuccessful (so far) in XIDEQ. What attracted me to XIDEQ is the asset position relative to the debt. I personally believe the bankruptcy was driven by poor capital management and a lack of liquidity, not insolvency. This is similar in many ways to General Growth and Pilgrim's Pride, both of which successfully emerged from bankruptcy. I'm actually shocked the CFO is still around as he did a poor job managing the debt obligations. Blaming the bankruptcy on the loss of Walmart a couple of years ago is just plain silly. The prior management did a poor job managing costs (primarily lead) and didn't reinvest capital properly in facilities.
What gives me hope is that that valuation backdrop has improved tremendously. JCI and ENS, the two primary comps for the transportation and industrial segments, have seen their valuations expand enormously since XIDEQ filed for BK. That will help when the final POR is filed. I also think that the December and March quarters, the two most important ones, will be dramatically better Y/Y given the cold weather and improvement in the Eurozone.
The current stock price implies only ~$16mm of recovery for the equity against an enterprise value of at least $1.5bn-$1.8bn. I find that hard to believe.
I'll have more as the days and weeks go on. The current stock weakness, in my opinion, is really tax loss related.
