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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Tomato who wrote (10448)	4/27/2000 9:01:00 PM
From: jeffbas	Read Replies (1) \| Respond to of 78958

On EBSC, there are two key events. The first is the suspension of a huge authorized stock buyback, where mgmt refused to comment of the reasons for suspension. It is plain as the nose on your face that this is because they have been advised they can't buy stock from shareholders when they are working on a deal of some sort. The second is the recent postponement of the annual meeting from May to August. If it had been held in May they would have lost some Board seats to an outside slate and would have barely retained control if they controlled all remaining outside directors, in office before the 2 added by dissidents last year. In my opinion, there will be a sale of the company or a leveraged buyout by mgmt before August. I have always thought in terms of a price of $8 to 10, not more. Obviously if the stock price is lower, the offered price might be lower. If there is no sale at all, I believe that the buyback will resume and get the stock back to $5.

To: Tomato who wrote (10448)	4/27/2000 10:58:00 PM
From: TwoBear	Read Replies (1) \| Respond to of 78958

FWIW, I read on the Yahooligan board that the word in Dayton is that Belk is a suitor for EBSC. Scott

To: Tomato who wrote (10448)	4/28/2000 12:40:00 AM
From: James Clarke	Respond to of 78958

EBSC - You want to probability weight four outcomes: 1) The stock continues to putter along in the 4-6 range until we all give up in disgust. 2) There is some real problem (credit sub?) that we're all missing, and we're looking at a $2 stock when the big holders pull the rip-cord and there's nobody to buy. 3) Management LBOs the company for $6-7. 4) A buyer is found in the $8-10 range. Unless you assign a big probability to #2, I really like the odds at a price below $5, especially given the pressure already on management to do #3 or #4. The new 10-K should be available to the masses tomorrow (I haven't seen it yet, but others did today - if the whole retail sector weren't getting crushed today I would not have bought because I would have concluded there was something in that 10-K that caused a big holder to dump. Maybe there was. But more likely, we were looking at "its an illiquid retailer, sell it" dump.) A close read of the 10-K may give a clearer idea of what the weight of #2 should be. I think my takeout values are conservative - remember, book value is $16, it trades way below net current assets, the company is profitable and there are several large shareholders to negotiate on our behalf to get a fair price out of the buyer. But with the price at 4 and change, no sensible bidder is going to pay his full price unless there is somebody else bidding against him (and right now I'd be thrilled to see one bidder). When I saw the price drop to 4 1/4 today I had the "punch in the gut" feeling that is usually a great buy signal. But if I see it at 3 1/2 tomorrow, that will be the "knife in the gut" feeling and I'm not sure what that means.