Chris, any comments on the following:
<Turnaround Expert Recommends Boston Chicken Bonds (BOSTG)
Thursday, August 13, 1998
"We buy when a company's gotten into trouble, their
securities have collapsed and people are panic selling,"
David Taft of IBS Securities told The Wall Street Transcript
in an interview. One example is Boston Chicken 4 1/2%
convertible bonds (BOSTG), which now trade at 20% below par
value.
The chain's strategy of growing by lending money to
franchisees proved poisonous, and a new CEO has refocused on
quality service and cutting expenses. Taft is confident
that management can turn things around but adds it's quite
possible the firm will not survive. "But as bondholder we
don't care," he says. If bankruptcy occurs, it will be to
escape from a horde of expensive store leases and shrink the
chain to a smaller group of more profitable stores, making
it easier to turn a profit and generate attractive cash
flows.
"The bonds are very cheap where they are currently trading,"
Taft says, "but investors should beware: this is a very
risky situation and the bondholders could lose everything if
this restaurant concept completely fails.">
From the publishers of Dick Davis Digest.
investools.com
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