. . . and all -
Let me see if I got this right. We started with an empty shell, varying degrees of hope, and someone working very hard to bring a little value back into an essentially worthless, abandoned entity. We all carefully counted the risk (didn't we?), then bought large quantities of the (really cheap) stock. We hoped against hope that some deal could be made (merger?) with someone which would bring new value to the stock, preferably increasing its value in integer multiples. Oh, and right away, if you please!
But to be realistic, whoever looked at CVIA had to think in terms of convenience and cost savings to the business entity, and how to cost-effectively make use of the potential benefit of the CVIA situation. In short, a beneficial-to-them deal. They were certainly not going to overpay for the potential benefits of a reverse merger with CVIA. [They're not huge!] They were going to pay something, but not a king's ransom.
Having established some basis for making the merger happen, the principals examined what it would take to get back on the NASDAQ board. You and several others made some pretty lucid posts about the very real dilemma they faced with the number of shares, their price, and the value. There was no way to get from here to there (to the needed stock value AND number of shares in the float) in a single step. It was either too little value, or too few shares, no matter how you exchanged one for the other.
But it was pretty clear, wasn't it, that there was going to be some kind of share-for-share exchange. 500:1, or 300:1, or 100:1? We knew it had to be a pretty big number. I think most of the reaction right now is not to the number so much as the reality.
With the dilemma they faced, it is clear that something has to appreciate to get the price back up to a value where they can get back on NASDAQ. Doesn't strike me that there many instant ways to do that. Sounds to me like following a steady growth-by-acquisition plan (their foundational concept, long declared) is maybe the best bet.
That latest walkdown in price hurt us. But dang it, that was always a possibility with this penny stock.
But I'm really bothered about the next step I hear contemplated. Now, let me see if I follow the logic. We are talking about a battered issue (CVIA stock), at the point of a merger with a fledgling company, whose whole value lies in acquisition, and we're talking about "helping" the situation through the legal beagles? The level of investments here haven't for the most part been in the $100,000 range. What do you suppose the legal costs will be?
But worse yet, how does this help the attractiveness of WOTD to the very dealers they need to acquire? And how does the threat (or the reality) of a lawsuit help the value of the stock?
For reference, I watched a precipitous drop in MLR, a company that was focusing on acquisition of small companies in a fragmented auto wrecker industry. It bottomed out and I liked the strategy and I bought. But, shareholders got upset at the drop (right or wrong is not the point here), and filed a suit. The stock was starting to recover smartly, but when the suit hit, that had the effect of stopping the recovery in its tracks. It's still stuck at that bottom value.
I think there is the potential for that to happen here too, and I for one don't want mine going down still more!!
Finally, this isn't a big organization we are dealing with here. A suit would represent a huge distraction and a large dilution of effort, as well as cost . . . even to decide how to deal with the possibility. That could cost US time, . . . and stock value.
I'm pained by the drop in value. The value of my xxx,xxx holdings have dropped more than I like. But, as I see it, the most likely way to get value back is not to knee-jerk react to what was always a possibility with this penny stock, but let them work the problem!!
Folks, we're kidding ourselves when we talk like this was a simple value investment. C'mon now, we were speculating, weren't we? Weren't we?? [If you weren't, then you did not do ANY due diligence]. The odds of a fast payoff were never in our favor. But at the end of the day, with reality setting in, my sense is that there is still a pretty good opportunity here. It just may take a little longer as the business follows its business plan (not too odd a thing, perhaps).
I still like the logic of the grow-by-acquisition plan. Some of the thread folks have commented on the need of many older tire-business owners to exit the business in a way that does not have huge tax impact. I know one such owner, and he did not have this kind of opportunity. He was simply forced to sell because of the competition of warehouse stores, and the unwillingness of the manufacturers to cut him a competitive pricing deal.
I think this kind of situation is the setting for success with the plan.
I'm standing pat. I still like the plan. The devil's in the details of any plan, and this one had no way to move without creating some discontent. I'm not happy with the devaluation of my penny stock, but the truth is, it's not too surprising.
I'd like to suggest that the thread folks with the itchy trigger fingers just think carefully and less emotionally about the negative consequences of legal action, or even the threat of it right now. I think if you want your stock to be worth more than you paid for it, you need to wait a bit and let them work their plan, . . . and not engage in distracting saber-rattling.
If I'm wrong, I lose. That was always a risk with this speculative investment. But I think there is still a pony in here, somewhere. I'm content to let the WOTD/CVIA folks do the looking. When you get right down to it, this isn't pretty. But then it never really was, was it?
[Whew!]
My continuing best regards to all you thoughtful and resourceful posters on this thread! Can there possibly be a stone out there anywhere that hasn't been turned over?
Oh yes, and length of post is in honor of Wayne J!
JimA |
