Well, the news is not good to say the least..but it should not be a surprise and the market has been telling us this for at least one year. We knew the goodwill was worthless, and we knew obsolete inventory had not been written down in years. The $1.50 book value was always hard to understand relative to what the shares were trading at. So now we have taken 78c out of the book value and another 55 c this quarter. That makes book value about as low as we can stand!!
But nevertheless, all is not bad. A headquarter in New York will enhance credibility. I was always nervous about an operation in Montreal. The sale of the Robin Building should give us a net gain in value since the building has depreciated..I'm assuming fair market value is greater than what is on the books.
Consolidation of the operations is a good thing, reducing duplication.
Margins are bad considering efforts to improve them, so that is a negative , but a firmer tone in pricing is beginning to be felt, so improvement is likely. Lastly, new management will make a fresh effort to be successful. There is a lot of reward money at stake for them.
I'm still holding my shares. And, I'm still an optimist.
Good Luck.
Joe, |
