Hi Richard...
There has been no insider selling to my knowledge with the exception of the Chairman, who sold 200,000 common on one occasion for the purpose of funding some trusts for his family members. I don't find this unusual or problematic in light of his age. You may well recall, the shares rose another 7 points immediately following his sale. Thus, an insider selling 200,000 common out of a 3 million share plus position doesn't mean all that much to me, *UNLESS* it is accompanied by other insider sellers doing the same thing.
I can absolutely assure you that management has been "considering" or "discussing" the potential spinoff of the Auto related operation for a very long time. How do I know this? Because *I* have had conversations with them to that effect, and I know that there are Board members that feel it is the right thing to pursue on a timely basis.
It is my personal view that some time within the next couple of months...assuming we get *one* more ITS platform or car company to sign up with us...it will be the "right" time. I can't speak for you, but I would much prefer that the true value of this company...ITS...which clearly has a very bright and buoyant future, should be trading separately from the balance of Simula. There are three essential reasons for that:
1) If the Auto operation trades on its own, any "problems" associated with the balance of Simula's business will be seen as insular to those businesses. For shareholders, it means that if the Auto related operation is doing well and its own stock is doing similarly, all of Simula stock will not be marked down in the event of a hiccup in another business. If, for example, Simula retained 80% ownership of the spinoff, its own asset value would include the worth of those shares. Thus, a markdown because of 16G or government products would be *understood* to have an impact on only that division, and would not dramatically affect the full company's stock.
2) The division would be growing at a minimum of a 50% annual rate for the foreseeable future. Hence, its market price will be derived at by applying a very high multiple to earnings. On balance, holders will be paid more by owning shares in both companies.
3) Employee stock options on the auto business will attract a higher class of employee than those attracted with options on the total company. The progress of the business is more effectively measured when they are being graded on the performance of the segment in which they work.
If Simula isn't making this decision within a reasonable time frame, I will be profoundly disheartened. To deny the market a chance to analyze the auto related business as a standalone (when it will be priced optimally and have many interested analysts) would be a great disservice to all of us.
Management knows how I feel, as I have been quite vocal in this regard. There is literally no reason that I can see *not* to do it.
Have a good evening. |
