To NW, TJ, Prof.com, Mad2,
I want to be clear here. As I indicated in my previous post, I am back in at $19.50. However, I am not all in yet. Sort of dangling my toes to see how the water feels ...if you know what I mean. I feel that the current trading range, (until we get more definitive word on the SPO) is $18.00/$20.00. I share some of Night Writer's concern over the current state of the broader market and so if we touch the $18.00 mark...I will re-enter with size. If not, and we just start to climb from here, I will try to catch it again before the november spike leading into the November 19th earnings announcement. If this was an SPO to pay debt down (like so many SPO's) I wouldn't like it one bit...but when a company is virtually debt free, and floats additional shares to fuel future growth and add some much needed liquidity to its shares...I love it. Besides, we all knew that Kim would eventually need to pare his percentage of ownership and given the alternative (selling 1.5M in the open market and the drag that would have caused) the fact that he will simple sell them to willing institutional players will only add stability to the share prices moving forward. As far as ELBO's 2.525M shares are concerned, they have stated in their SEC filing that the proceeds (approximately $40M) will be used to continue their store expansion program and highten their brand awareness. This will only translate into additional revenue and increased earnings over time. So, from my perspective this is a positive event and I believe the market will come to see it as such. Look for additional analyst coverage to follow the SPO ... as awareness of ELBO and confidence in the companies continued positive performance increases.
This post represents my opinion only, and should not be taken as advice to buy or sell securities in Electronics Boutique. Serious investors should do their own research prior to investing in this or any company.
Voluntary disclosure: I am long shares of ELBO.
Best of luck to all who frequent this board.
RBL |
