Well, I guess I'll add my two cents here. First of all, the bid must have been too low for JT. I believe there are several reasons for this:
1. ABT is now a loose federation of previously family owned businesses. JT has not woven them together into a unified whole; this takes both time and capital. He may not be capable of melding these companies into an earnings machine. And he doesn't have a lot of capital. So other than buy up all the small players, he hasn't packaged them together yet. An acquirer would pay a lot for the right packaging. He was trying to sell the sizzle, not the steak because there isn't a lot of steak yet. The biotech, such as it is, is years away from producing anything commercially. Right now its more sizzle than steak, too. In other words, it was too early to try to sell the business.
2. He wanted to sell because he needed cash. And he probably needed it fast. Not a good time to sell. Got to sell from a position of strength, not weakness. What he's got to do now is to get the financials in order as best and as openly and honestly as he can. I don't have any idea of how cash strapped the company is, but I have a feeling that the situation is not great.
3. Earnings will now be very important. He's got to have earnings and they better be real. Earnings reflect how he's running the company, and show whether he's improving the low margins.
4. So, playing time is over. JT's got a lot on his plate. Financing, integration, lawsuits, we all know the score. I wouldn't count on Soros, the State of Wisconsin, or any other big investment institution for help either. Each one is in this for their own interests, not his or ours, for that matter. They will all bail if they feel the opportunity is not what it was. And they will bail before we can. I'm sure JT had to clue them in ahead of time as to what was happening with the acquisition.
5. I don't know anything about the forage and turfgrass business, but now is the time to stop acting like an amateur and start acting like a pro. Get rid of all the family brands and put the ABT name on everything. It's one company.
6. I don't post much, but I said before that I would be long as long as I believed in management. I'm one of those investors that buy into companies that I think are run by great people. I'm not sure about these guys anymore; they know how to deal with the small seed companies, but I don't know if they can run a big business. Maybe they're unsure too.
7. I feel bad for all of you that got in at the top. It's going to be a long time before we're there again. And we all know what Monday's possibilities are.
8. I am curious to know what Ms. Powell thinks of all this.
JBK |
