Good taste in things is a rarity. Good taste in management is even rarer still. Outright stealing, yet another. If a management team offers to take a shareholder's $1 in cash and give them $0.70 in return, is that a breach in fiduciary responsibility? Perhaps not, but it is poor form in my books.
If I took 30% of something that belonged to you that would be wrong. Here is a helpful child's primer.
In the the minds of CEO and CFO Mr. Jeff Cavins $358K/year and Mark Stubbs $318k/year it is acting prudently. The CEO and CFO of Callwave (NASDAQ:CALL) have decided to offer approximately $24.3 million dollars for their firm which had a reported cash balance of $35.2m and no debt. That works out to a 44% return for the fellas.
The acquirers can shut down the company and take $10m between them, leaving the shareholders they are supposed to represent to twist in the wind.
The legal definition of grand larceny is theft of $500 or greater. It is important to remember when stealing to wear a business suit and not a track suit as one leads to jail and the other to bailout.
I am not accusing Mr. Jeff Cavins or Mark Stubbs of doing anything technically wrong, but they and their Board of directors Peter Sperling, Jerry Murdock, Jeffrey O Henley a director of Oracle no less, Raj Raithatha, Osmo A. Hautanen and Manny Rivelo currently with Cisco (NASDAQ:CSCO), have a very curious way of protecting and maximizing all of the shareholders value. Just because one can, doesn't mean one should.
You may look up these fine gentlemen's names and other roles via the SEC here.
Or contact investor relations to learn about this magnificent plan to enhance shareholder value
One might wish to consider steering clear of firms these gentlemen are associated with due to the rather awkward nature of the current transaction they seem to be pursuing or endorsing.
As Buffett says, how would you feel if you were on the other side of this deal? After these esteemed gentlemen are done with you as an investor, that burning sensation in your behind may not just be your wallet.
This is yet another friendly group of individuals helping you make a small fortune, provided you put forward a larger one at the start of the deal. How "all too common", and banal that offer is these days. I thought Washington D.C. was monopolizing the shrink ray pointed at your fortune space. This of course after the banks were done monopolizing it.
Value investors look for management and board representatives to act as partners and stewards of their trust. Few investors would be interested in a partner who looks at your $1 and realizes he can buy it for $0.70 reaping an immediate gain at your expense.
Please note, I am not accusing the esteemed Mr. Cavins and Stubbs or their illustrious board of anything illegal, but rather being merely uncouth and lacking in class. From a strict dictionary definition this may make them dirtbags. Perhaps the SEC has another opinion?
Full Disclosure: I consult with a fund that holds a position in Callwave, but am writing here in a personal and not professional capacity. I have no direct financial interest in the outcome of the Callwave situation.