Paul,
I woke up the thread -G-
How many shares of Namtai does Koo control?
I don't think that anyone has been had more scepticism about Koo than I have. If you'll recall, I sold my shares in Namtai when the secondary offering was made and stated my distrust of him as the reason. I even made the statement that I would sell my Deswell shares if they merged with Namtai. That was before the Global 'crisis'. We are now dealing with an entirely different situation and I'm looking at anything that might maximize the potential for stockholders of Deswell = ME.
I've looked at the two companies after Namtai's acquisitions and see merger potential, particularly with a weak economy going forward. This is a time for the strong to take advantage of their strength and force out the weak companies. The best method is for the strong to merge together. If they don't, the larger companies (like Flextronics) will dominate. I felt Namtai paid too much when they bought Albatronics, but I also tell myself that it's not the kind of mistake that Koo makes. I don't care for his tactics and felt he took advantage of investors, but if one stands back and looks at it as him doing what's best for the Namtai, it's a different picture. He sold the Deswell shares Namtai held at a good price, sold real estate in HK and Canada at top dollar, and made a successful secondary offering just before all of it collapsed. Koo achieved what all companies in Asia are now trying to do- raise cash, preferably in $US - and now has Namtai buying financially stressed companies. I'm not defending his past actions, but the only thing he did that might be considered illegal was having Namtai buy back his margined shares - at less than he paid for them, but possibly at a price higher than the shares were worth. (He also blew money hedging $HK - should have listened to me -G-)
IF- big 'IF'- Deswell could make a merger with Namtai that gives Deswell management some control over Namtai's operations - I believe the merger 'could be' beneficial to both Deswell and Namtai shareholders. It depends on the deal. The idea of Koo as Chairman of the Board and Lau as CEO wouldn't bother me as long as Lau had the Board votes to overrule Koo. Koo is a 'fast and loose' sales person, Deswell's management is conservative and hands on. This 'can be' a very good combination.
The combined operations would generate some major revenue and, with reduced overhead and better efficiency, could be very profitable. If one looks at the details of each, there's a pretty good fit.
All arguments to the contrary appreciated.
JMHO,
Ron
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