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

To: David who wrote (25726)	1/15/2007 1:35:53 PM
From: a128	Read Replies (1) \| Respond to of 78524

I have owned SPOR for many years and the only reason I have made any money from it is by buying low and selling higher. Its amazing that I havent lost money given the company has been bleeding red for so long. (The margin of safety helped no doubt) The previous chairman and his son who was CEO were incompetent at best and possibly crooked. They got golden parachutes in excess of what was called for in the proxy. None of the board members seemed to have any real oversight for the years of the Tomlinsons mismanagement/fraud or whatever you call it. While I believe that SPOR has value in a buyout, I dont know how much value it has in excess of its book value. (Approx $5.28) The 3 most senior officers, each of which as been with the company for years,directly own ZERO shares combined. The board, directly owns just 5.44% combined. (excluding options) Now, they have a bunch of options bringing that % up a good bit. There has been ZERO open market buying for many,many years even when the stock was as low as $2-3. They had hired an investment banker to help them explore strategic alternatives and after a year or so they disengaged them without taking any action. (PURW did the same thing and was later bought out at a nice premium) Then came the 25 cent dividend and now the dutch tender offer. I have mixed feelings about going dark because its already illiquid and going to the pinks would only make things worse. But, the annual SOX & public company savings could be $200-300k per year which is not chump change for a company with just 2.77 million shares out. (Less any shares tendered) There are 5 holders of 5% or more. One or more of them could have pressured for this tender offer as a way for them to liquidate a portion of their holdings. On the other hand, the tender offer announcement has likely brought new buyers to the stock that are here for more than just the tender offer arb. They could have already gone dark if they wanted. And, my reading of their TO document suggests they may give us another "out" before going dark. (What do you think ?) "However, we do not intend to discontinue those reporting obligations or to de-list our common stock from Nasdaq without providing all of our remaining shareholders other than affiliates with a mechanism to sell or exchange their shares in one or more going private transactions. As stated above, the Board of Directors has not definitively determined to pursue a “going private” transaction at any time in the future." The reason I think they may have turned things around is I believe they have had several quarters recently that showed improvements over the prior year. The last quarter sales were up 17% over the prior year. I think its possible that they are profitable THIS YEAR. A decent earnings year with a positive outlook would make the valuation much higher than $5. I have to think that one or more of the 5%+ holders will tender some shares. But, new buyers could mean the shares wont trade below $4.50 anymore. I really dont know. I dont know what I plan on doing. Frankly, I dont think I have enough information to come to a positive conclusion as to the best thing to do. A guy on the yahoo board was recently attracted because of the DTA. messages.finance.yahoo.com