Selling the whole or parts of the company is just what the doctor ordered! Kudos to CEO Bergeron and GAC's board for taking this bold step. I'm glad that management is abandoning its strategy of acquiring old economy, bulky, main frame sector. GAC was suffering from (a) lack of market recognition on the true worth of its assets and (b) the burden of transitioning its old economy data processing business to the new world. Both of these problems will be resolved by selling off, and starting new.
The question next for us diy investors is whether it is now the time to sell. I had several members of my investment group calling me yesterday to discuss this. My thoughts are it is way too early to sell and more importantly, the stock is worth much more. Analysts are starting to come out of the woodwork to claim personal fame by pounding the table that the stock is worth much more. Based on revenue alone, the range is from $15 to $45. As recently as in May this year, Yorkton had a $45 target price. This target is reachable now that the company is up for sale. InteRealty.com alone has an estimated market worth around $8 per share. Then, there are still the other divisions to be sold -- publishing, hospitality, libraries. So, I will hold on to my shares and wait for a MUCH better price. In fact, for traders, this is a good time to buy and speculate for a profit. The technical price momentum is now UP!
Do we trust management to carry out its announced intention to sell all or parts of the company? Is this just a ploy to raise the stock price from the dumps? I don't think so. Bergeron is relatively young, and he has a long career still ahead. I can see what he is trying to do. It is a fool's game to continue play the consolidation game of old world data processing businesses. It is too giant a task, if not impossible, to try and turn the old ERP businesses around to the e-commerce world. The right solution is to sell while the assets are still valuable.
I was pleasantly surprised reading the G&M article that IBM might be one of the people lining up to buy parts of the company. I wasn't aware that GEAC had proprietory software of interest to IBM. It just adds icing to the cake. |
