The future sure didn't look like this when they were buying!!!!
I assume that we're both talking about Cooperman/Omega here? (If not, it's my fault for being too terse in my previous posting)
Didn't they buy around $US9, which would place it around Dec98-Jan99?
Everyone knew (or ought to have known) that Loewen had a history of overpaying for acquisitions. I learned of this from a newspaper article published in the Globe and Mail in 1994 or so.
Also, they financed a good portion of this with debt. As a result the balance sheet carried assets at very generous values, versus pretty heavy debt. I don't know what Omega saw when they bought in at $9, but based on what I know as a small, outside investor, it really knocks down my estimation of Omega's savvy.
W.r.t. CIBC, they never went out and bought the stock, they inherited it from Ray Loewen when their loan to him went sour. One might question their wisdom in loaning the money to him, and also question their wisdom of keeping the stock once they foreclosed on the loan. Admittedly they would probably have found it difficult to dispose of their 10-ish percent stake.
Anyhow, perhaps I shouldn't be too harsh. I briefly discussed Loewen as a short idea in December when it was about $C15, and lamented that I had waited too long and missed the boat. Shortly after that, I'm shorting it at $C3.... go figure ;-)
- Daniel |
