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  • Willi-Food International Should Be Taken Private For A Potential 100% Gain [View article]
    Joey, yes, nothing is ever that simple and there's risk. Yet, to get the company go private, there is no easy way around buying out minority shareholders to delist from NASDAQ.

    This reminds me of an old joke: two (University of Chicago) economists walk on the street and one notices a $100 dollar bill lying on the ground. One says: Look, $100 bill! The other says: Nah, I won't bother picking it up. If it was real, someone would have already taken it.

    WILC is that $100 bill. There is a decent chance it's real, if it's not, you won't lose too much as it's already very cheap.
    Mar 22 12:31 PM | 2 Likes Like |Link to Comment
  • Willi-Food International Should Be Taken Private For A Potential 100% Gain [View article]
    Thanks Yair. The article was concentrating on the share sale deal. I recommend an article I linked for business overview.

    Why do you think they got "preferential treatment" from Shuferstal in the first place?
    Mar 22 09:50 AM | Likes Like |Link to Comment
  • Micronet Enertec: Post-Merger Messy Financials Obscure Explosive Growth Potential [View article]
    Haven't had a chance to go through all details. I may do a follow up piece after some analysis. The financials are still quite messy due to a merger. Judging by the stock price action, the market was clearly confused about the results yesterday.
    Mar 20 09:29 AM | Likes Like |Link to Comment
  • The Nuclear Option: Russia's Threat To Dump Treasuries [View article]
    Agree. Add to this Dagestan and Tatarstan. Both of the peoples have talked about secession from Russia for many years. I think Putin only knows tactics but has no strategy. He will win some battles but will lose the war.
    Mar 14 03:41 PM | 1 Like Like |Link to Comment
  • The Nuclear Option: Russia's Threat To Dump Treasuries [View article]
    Russia and its allies..I wonder would that be - Syria, North Korea, Belarus? Certainly not China.

    China cannot be happy about Crimean referendum as it has Tibet and Uighurs to worry about. China would also probably have to de-peg from US dollar to dump the treasuries.

    The author is right that the Fed can step in and buy it, with the countries dumping treasuries being hurt most.
    Mar 14 03:04 PM | Likes Like |Link to Comment
  • Rick's Cabaret: Terribly Managed, Great Business [View article]
    I did a write-up on Rick's last year. While you may have a point on opening new restaurants (I'd also prefer they stick with strip club business where they are the biggest operator), I think you are wrong about the REIT.

    Rick's pays very high interest on real estate loans, because banks don't finance strip clubs, and the company appears to be much more leveraged to investors than it really is. All this leverage will be gone from its balance sheet and transferred to REIT. REIT will be able to raise money through shares issue to private investors at a probably cheaper rate. Secondly, REIT will pay no taxes, but will charge RICK rent, thus minimizing overall effective tax bill.

    I am not sure if a REIT conversion will be allowed by IRS but if it is, it will have an immediate positive effect on earnings.
    Mar 12 11:02 AM | 1 Like Like |Link to Comment
  • Emerson Radio Is No Longer A Value Trap [View article]
    The contract with Funai, which is responsible for close to 90% licensing fees last two years, has been extended to March 2018. The run rate is based on 9 month annualized reported in last 10 Q. You can apply your own estimate if you think that for whatever reason the license revenue will decline but I don't think it's very likely. It's been steady over the years and their biggest client is locked in for next 4 years.
    Mar 11 02:18 PM | Likes Like |Link to Comment
  • Emerson Radio Is No Longer A Value Trap [View article]
    Robin, I am aware of that. Sino Bright appears to be a Ho enterprise. However, if they get a piece of Emerson in bankruptcy, they would be interested in maximizing shareholder value, unlike today where the shareholder value is zero to Grande because it's set to lose the assets. To me this is not about people but about the money. Today, Ho and Co. can only extract value from Emerson by milking it and so they do.
    Mar 11 09:54 AM | Likes Like |Link to Comment
  • Emerson Radio Is No Longer A Value Trap [View article]
    $9.66 is a run rate for licensing today per their 10Q. I assumed it will stay steady.
    Mar 11 09:48 AM | Likes Like |Link to Comment
  • Ukraine Crisis Escalation - Winners, Losers And How To Profit [View article]
    Cliff,

    I am not sure if this was an intentional pun. It's URALkali (as in Ural mountains), not Ukrali. Ukrali means "stolen" in Russian.
    Mar 10 08:40 PM | 2 Likes Like |Link to Comment
  • Emerson Radio Is No Longer A Value Trap [View article]
    I hope not. For the history, I relied mostly on Wikipedia:

    http://bit.ly/1nAxznf
    Mar 10 10:07 AM | Likes Like |Link to Comment
  • Emerson Radio Is No Longer A Value Trap [View article]
    Robin, the problem today that there is no real equity holders. Grande's stake is sure to be lost to the creditors so they don't care how well the company does. The new shareholders would have to steal from...themselves.

    A typical problem arises for minority shareholders when the majority shareholder is the government entity (think Chine SOEs). For such a company making profit or share prices take back set to the government policy.
    Mar 10 12:28 AM | Likes Like |Link to Comment
  • Emerson Radio Is No Longer A Value Trap [View article]
    I am not sure how much the product business is worth but it should be worth something since they have existing contracts with target and sears. You can go to target web site and see their products. I am also not sure why the new owners would want to squeeze the minority shareholder. They should care about the share price which is defined by the marginal buyer, i.e. minority shareholder.
    Mar 9 07:22 PM | Likes Like |Link to Comment
  • Emerson Radio Is No Longer A Value Trap [View article]
    Robin, my point about current owners vs. creditors is that the current owners don't care whatsoever how much Emerson is sold for because they will not get any money from the sale. It's not so for the creditor who will actually own the asset and will need to extract the value out of it.
    Mar 8 01:28 PM | Likes Like |Link to Comment
  • Emerson Radio Is No Longer A Value Trap [View article]
    Brian, thank you for your extensive comments. Let me address some of your concerns.

    First of all, there's quite a bit of material available for HK court case from Grande site. Here's winding up order requiring the company to submit re-listing order or be liquidated in 6 months dated July last year.

    http://bit.ly/1lghqBR

    The liquidators made the last proposal on January 10 this year to re-list the company. If this proposal is rejected by the court (I fully expect so as all creditors object), Grande will be liquidated. In the past decisions by this court took between 1 and 4 months so I am optimistic, the decision to liquidate will be made by May.

    I don't think it matters too much who the creditors of Grande really are since Emerson is just an asset to be sold. Right now Emerson is in limbo and its management and the board of directors has no incentives to maximize shareholder value as all shares will go to the new owners whoever they may be. Once you have the new owners, they will start thinking how to maximize the shares value.

    As far as tax claims are concerned, I was very conservative and assumed the full tax liability for dividend and back taxes with penalties assessed for a total of $17.8 million (the worst case scenario they had to disclose on their 10K). Emerson estimates the likely liability around $1.1 million on their 10K but I tend to distrust them, thinking they are under-reserving (and they are audited by some smallish company who wouldn't probably challenge them).

    As far as repatriation taxes are concerned, you do have a point, but I expect the buyer of Emerson to be foreign, almost certainly Asian since this where all their manufacturing is done and licensing revenues comes from. Nevertheless, you may be right that I need to apply a slight discount to the cash and equiv. on the B/S.

    All in all, I think my valuation was quite conservative and I still ended up with about $4 a share.
    Mar 8 12:32 PM | Likes Like |Link to Comment
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