Bill Gates Helps Out Autonation
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It is official! Bill Gates has to be the most charitable man alive. Now, he is providing a chunk of his assets to help out ailing Autonation (AN). Sure he takes a nice piece of the company and if you look at the history of this once darling/roll-up king, you will realize that this may be actually approaching a bottom.
Whether it is a brilliant move or a plan for a tax write-off is still not known, but it does appear that Autonation’s CEO Michael Jackson seems to have a plan for cost cutting and working within this difficult environment. Do we follow Gates into this without any thought? Do we then follow Lampert as he has been continuing to add to his holdings (40% now)? Maybe not.
How about a contarian play? Maybe… Whatever you think about the fate of the auto industry, this happens to be a well run company that is caught within a very bad situation. It is at a relative low and as oil prices seem to be turning and companies are waking up to the fact that they need to change their ways. This could give Autonation a boost. The biggest concern is still the consumer and his or her ability to buy or borrow to buy a new car.
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This article has 11 comments:
If you are an investor - this is a good company - if you are a speculator thinking you can make 30% in the next day - you should not be in stocks at all.
Horowitz
What are you talking about? Dribble, pure dribble. If you need to slam someone, do it on the b-ball courts and leave the thinking to someone who can actually do it.
We can assume that you are long and have been riding this down for years??? Same thing, different day.
The sad part is AN will potentially go private at a price much lower then the value of the investment in assets - playing the emotional market enhanced by the media - to buy the company below the intrinsic value of the producing assets.
In the end - economics is eventually recongized in the market - but emotion will drive many from using sound investing judgement. I don't know you - but most of your original comments were on track - however it amazes me that financially oriented analyst bait their work with attention grabbing titles - suggesting something like bailout or saving a company going down for the final count.
Today - too many people watch the stock market - and too many people have their life savings and pension in the market. 30 years ago the average worker was not interested in the market - today most workers and the general population are feel their financial security is tied to the market - and they panic when the media sensationalizes the facts - pushing the market and public to extremes. It would be nice if the media would take time to educate the general population on investing for the long term and understanding market cycles.
Jim - older and wiser
The issue is - the smaller investors should be allowed to stay in the game - and realize the $1.20 with growth starting in a couple of years - or $25 per share.
Do you think Lampert wants to take AutoNation private, or perhaps fold it into Sears Holdings?
Also, I am surprised that Lampert, or ESL partners have not increased their ownership at these lower prices. Is he restricted from buying around earnings time?
AN could be an interesting addition to Sears - but there are other options. The addition of the Gates group into the mix will also make options interesting. The market does not control the share votes on this one. Also with so little stock traded on the market - the market price can be dynamic -
This should be a $20 stock - and it really is a $25 stock if we assume the auto market will improve. America needs transportation - and the auto is a part of life. It may not be gas powered in the long term - but it will be an auto powered by something. The margins on these smaller vehicles will be much better as demand increases and as those who switch add comfort options to the base car.
So sit tight - buy shares at these low prices - should have bought more at $7 ish.
I am blown away by the latest 13D filing. Looks like Eddie picked up right where he left off, buying right up to the 45 day blackout period prior to earnings, and exactly 3 days following earnings he's buying again, only this time with the lower prices, he's taking down bigger blocks of shares. This is going to get very interesting. As of July 10th, the short interest was 21.6%. Insiders own over 55+% of the shares, and between the company buyback and Eddie's purchases, I don't see how this thing doesn't spike higher.
Is it possible the reason people are selling is because of fears the company will be taken over without a premium?? Other than margin calls or forced selling, thats the only thing I can think of that might motivate someone to sell at these prices. Otherwise this stock is going much, much higher.