Larry,
Lets analyze this another way. Go compare all they key financial ratios of PAIR and ADCT. With the big exception of earnings, PAIR's are about 1/2 of ADCT. Things such as price to sales, book value, PAIR has more cash equivalents at $550 than ADCT at $350 Million, etc., etc.
PAIR management is not tops on my list. But I will certainly say that they manged to maintain a stellar and exceptional balance sheet. Free of debt, loaded in cash, no intangible fluff.
Anyway, the point is that the financial position of PAIR greatly offset the downside risk involved in holding/trading PAIR. That risk has/will be increased when/if the shares convert to .43 ADCT.
A higher ratio than .43 woud give an investor a fair chance to decide if they wanted to assume the risk. As it stands now one would be going from (for example) price to sales of 3 PAIR up to 6 with ADCT. (Try some other ratios to get the same results).
Controlling risk and controlling downside is one of my most important focuses, and I personally don't like my PAIR risk increasing by a factor of 2x.
Until the merger goes thru I haven't assumed that risk. So a NO vote is in order. Should ADCT fall back, the NO vote protects my interests. Should ADCT increase, I can always sell the PAIR and move on at the point PAIR reaches my targets.
Should I want to assume the risk level of ADCT, with no premium involved, I could just buy it on the open market.
This deal sucks. Period.
Disclaimer: PAIR management still has to go. ADCT or not. |
