Premier Exhibitions Misses the Point

Jan.11.09 | About: Premier Exhibitions, (PRXI)

By Hewitt Heiserman

Last week I read Premier Exhibitions' (NASDAQ:PRXI) reply to the Sellers Capital Solicitation. What a waste of 18 pages of paper! Geller's response is as limp as the spaghetti noodles I had for dinner.

In sum, Geller and his attorney take pains to refute on a micro level several aspects of the Sellers solicitation. Fine. Maybe Mark and his team didn't dot all their i's and cross all their t's.

But given the precariousness of Premier Exhibitions' situation, I also expected to read Geller's comprehensive 12-point plan for turning the business around. He has been back at the company since late-summer, so he must have some sense of where he wants to take the business.

I looked, to no avail. Instead, Geller resorts to bromides like, "I did it before [built the company], and I'll do it again."

The response does reference the involvement of a management consulting firm that the company has retained, but no additional details are provided. We are not told whether the consulting firm has worked with similar clients, nor its track record.

Big picture? Geller's refusal to welcome the four Sellers nominees to join the board speaks volumes. Each has impressive credentials, from what I can tell. Geller's narrow-mindedness heightens the company's risk of bankruptcy, in my view.

One funny item is that Geller attempts to undermine Mark Sellers' credibility by citing Mark's poor investment performance in 2008. Ignoring the obvious circular reference here (i.e., part of the reason the fund is down is because Premier is down), Geller is also selective in his facts. If Geller wants use Mark's 2008 results, then Geller should mention the long-term record, which is impressive. Since inception on Aug. 1, 2003, the Sellers fund has returned 19.3% (net) annually, vs. 0.2% for the S&P 500. In 2008, the fund declined 23.4%, vs. a 37% drop for the S&P 500.

Sign your Solicitation Consent and mail it in today. Premier Exhibitions needs new management.

Disclosure: At time of publication, Hewitt Heiserman and Complete Value Investor held long positions in Premier Exhibitions. These positions may change at any time.