Because I suspect there will be no preferred for sale.
ExtremeJim
May 4 1998
9:21PM EDT
NAVR's announcement this morning that they have completed the private placement of
the preferred issue also contains the news that one Alfred Teo has been appointed to
the board of directors.
This suggests to me that Mr. Teo is the one who got the preferred shares. Mr Teo and
his wife have purchased over 15 percent of the common stock of Musicland Stores
Corp. (NYSE:MLG) over the past two years, and from his public SEC filings they
have lavish appreciation in that stock, as he bought at prices ranging from under a
dollar to just over seven. (Today's close for MLG, 12 3/4.)
The bad news is, you can't buy the preferred because Mr. Teo won't be selling. The
very good news is, he has proven to be a long-term friend of Musicland rather than a
short-term speculator, meaning that Navarre will not be dropping to 2 5/8 as June 30
approaches, at least not because of this private placement that last week threatened to
dilute the public float. In the case of the other stock he seems willing to wait for a two-,
four-, six-, or twelve-fold return.
Just a theory, you understand. By the way, you could walk between the Musicland and
Navarre corporate headquarters in about an hour, and Navarre is a Musicland vendor,
and Mr. Teo's New Jersey companies make, among other things, plastic shopping
bags that record, video, and software stores use. I think I will stay long in Navarre.
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