Don-
I don't know what is going on. However, one needs to look no further than today's stock action to notice a positive, albeit strange response to the press release.
At first, the stock was halted, due to a news dissemination. The last trade was at 7. Before the stock was halted, it had traded as low as 6.625. After resuming trading, NM traded around 6.875 and 7 for a while. However, as the day progressed, the stock rebounded strongly, on several large blocks of stock being bought. After falling from a close of 7.875 to a low of 6.625, it rebounded to 7.5 on 858,000 shares. Most of this volume traded during the ride up from 6.875.
It seems that the news looks very bad, at least for the business of National Media. Hershhorn had expected this quarter to be profitable for the company. It wasn't, and now there will be a loss of at least .13 for the 4th quarter.
And now for some reason, Hershhorn's out. Verrati, yet another Safeguard-affiliate, has taken command. Safeguard has a majority of the board of directors now, I believe.
Lehman Bros. is probably being consulted as to the best method to sell the company to the parties that have been gobbling up shares. There has to be more than one acquiror, since we all know there should have been a 13D filed long ago.
I quote:
In addressing the retention of Lehman Bros., Mr. Hammer said that the
Company's Board of Directors and senior management decided...to procure additional advice
regarding strategic business alternatives after heavy trading in its common
stock during the period of late February and early March encouraged
speculation about outside interest in the Company. "We decided at that time
that we needed an additional independent perspective in order to best serve
the interest of our shareholders," Hammer said.
I think he really means, "We really have to find a way to recoup our shareholders' losses, or else they'll lynch us."
NM management has an obligation to enhance shareholder value, not torpedo it. I consider myself pretty reasonable and level-headed. So since I'm calling for some value enhancement, I can only imagine what most other NM shareholders are calling for (probably the heads of the management). I'm shocked that there has been no class action lawsuit filed against the company yet. If the directors wish to avoid such an ordeal, it's in their best interest to create some value...fast.
In my opinion, management has been quite incompetent, or else NM would not likely be losing money AGAIN. The management shuffling has not helped yet, and I suspect there is only one way that Safeguard/board of National Media will unlock the value for us shareholders: sell the company and let someone else worry about operating it.
I'm all for it. I am completely unhappy with the management and operation of this company. I will be glad when this whole ordeal is over. If I had thought that there was no chance for some kind of retribution, I would have sold out months ago, and I wouldn't have looked back.
But the press release and the stock action today (during which more stock was accumulated) indicate more than ever that something may be in the works.
And for everyone else who's reading this: I'm not suggesting you buy or hold or sell or anything. I'm holding onto my stock because I believe the upside is much greater than the downside risk. Book value is around 5.875 per share (as of 12/31/96), and the comeback today indicates that there are buyers who will not let NM trade that low.
Just one of the many
disgruntled shareholders,
Todd |
