The reason no one gives him credit for rapidly building the company is simple.
Give me 245 million dollars and I can go out and rapidly build any kind of business, whether I know anything or not.
Companies that build, do it the old fashioned way, they earn money and then reinvest that money into the business.
With regards to dumping, gee I suppose that Japan has never dumped on semi conductors yet Texas Instruments is still a viable company. Good management has to take all these factors into consideration. This is not the first time Asia has dumped steel on the American market. But I haven't seen an evidence that suggest that Asia is dumping scrap onto our shores.
Everybody is acting like scrap prices just started to plunge downward, scrap prices have been going lower for almost a year now. Seems to me the really good management took advantage of RECY's greed and got out when the getting was good.
Last November, I was saying that the problem that I see with RECY is that they do not have the cash to get into all the acquisitions they were talking about. I was wrong then, because they were able to borrow 235 million, but that borrowing had a price.
Always remember and never forget "A dollar borrowed is not a dollar earned".
However, with all that said, I do agree to one thing that has been posted to this thread, scrap will always be with us, but large recycling companies will never exist unless they grow through earnings, not borrowings.
I know a little about the waste management business, if you doubt me then may I suggest that you check out a stock, CWST, on Yahoo, go to profile and check out the officers in particular the Sr VP and COO of that company. For the lazy, the URL is biz.yahoo.com Also notice, they make money, they have been in public for less time than this company and look at their chart.
John |
