Re: FLYT
Any comments on net-nets that look to be about to enter a proxy fight?
This is the company that developed in flight entertainment systems, but decided to quit while the quitting was good and redeploy its assets (mainly cash) more effectively. Most recently, they paid $800K for a dry cleaning business with $1.1M in annual revenues - so perhaps they are effectively deploying their cash?
This is a company that, according to Yahoo, has $2.45 per share in cash, with a per share book value of $2.04. When I checked the 10QSB, these numbers seemed to be more or less current and sensible. The stock sells for 72 cents or so.
If these figures are correct, you'd be buying a dollar of (mostly cash) for 35 cents.
In order for an investment like this to work out, the value of the company's must be realized.
Recently it appears that an outside group (Ocean Partners) is in the process of mounting a challenge to present management, contending that management should be replaced. This group includes the father and brother of the company's CEO.
So it looks like there might be a fight, and it might be unpleasant. Realizing this, do 35 cent dollars provide enough margin of safety in a case like this? Does anyone have a better idea as to which side is "right" (if it's possible to determine this sort of thing), and whether there is a good expectation of this being resolved in a manner that would justify buying shares at today's price?
- Daniel |
