So-o-o-o, it sort of sounds like this to me. The only residual value in CVIA was the shell and the determination and expertise of one of the board of directors not to lose his investment in the enterprise. In WOTD, there is a modest sized tire business which has a willingness to grow, but not the capital. The two get together and develop what appears to be a viable path for growth into a larger business by acquisition.
One small detail. Neither has the available money to do any acquiring. So, having agreed on the strategy, they work on a merger, meanwhile looking for a path for getting the capital to make it work. They have to make it work fast or the guy who's driving it will run out of money/energy and have to go on to something with greater promise. Hence, the Reg S approach, not ideal, but from a pragmatic standpoint, a way to move on. Izzat about how you see it so far?
In the beginning, one of the deciding points for me to buy in was the fact that Jack had his own holding at something like .40. I figgered he'd work (and evidently has) like a Trojan to salvage that holding.
As I thought about it a little more, I realized that stock price improvement was not the only vehicle for Jack to be rewarded for his effort in bringing the two companies together. The value of CVIA is basically whatever its value appears to be to WOTD, and that would reasonably include some compensation to Jack for his determined efforts and skid-greasing to bring the merger to pass.
That weakened my optimism a little because his financial life did not depend solely on the improvement of the stock price.
Now that it appears that the tire company does not have the wherewithall to acquire other mom-n-pop operations on its own. That has caused an upward tick in my optimism because it still may be possible that the major payoff for Jack lies in restoring a reasonable value to the stock.
I guess (and I'm not very knowledgeable about this stuff) that it is still reasonable to expect some m-for-n stock conversion to occur in order to get the price back into a credible range, desirable in a publicly traded stock. I'm still "in", but it seems to me that the scenario ahead is not likely to be an "instant big winner", but holds decent prospects, and maybe better for a little longer hold.
That's the end of my mind dump. What seems right and what seems wrong about this assessment, y'all? BTW, all the continuing conversation about the goings-on has sure helped me in sorting out what to do with this holding. Thanks to you all! Oh yeh, and the consolidation of the information on the web page is a nice/helpful contribution as well (particularly to the newcomers). JimA |
