Yea, I got interested in Asaleo thinking there's a potential bargain here. But after going through the IPO and the latest results and management buy-back of stocks... not good. I'm surprised it's legal.
For management to be buying AHY back at current, and they've bought at higher prices - $1.70s right?
For them to tell us that they're buying it because it's a great business at this price, one so promising that they just have to borrow more cash to buy... well, you just got to ask yourself, if it's so great, why did they sell it just 2 and a quarter year ago for the same price?
Seriously, why sell it to now buy it back at the same price?
The board and CEO are the same guys who sold out and float the dam thing. If they saw a great deal of value, they wouldn't have sold it to us little guys.
Speaking of which... they, both PEP, the management PEP put in place, and SCA looted the dam "company" of some $500m before they floated it. PEP never really put any money at risk and still already got at least half of that $125m back within a year of lending it at 15% through the pref. shares.
PEP and SCA got some $325m back for some "loan" they gave but I couldn't figured where that is on their financials. That plus $50m of capital return to themselves
So all that were done before the IPO... and at the IPO, all the cash that were raised plus all the new debt they've loaded Asaleo with... it all goes to PEP and management and repaying the debt that they've decided to borrow and paid themselves back.
It's the same game Anchorage played with DickSmith. Smarter too because this time PEP didn't even put any cash in - Anchorage at least put in $8m. Smarter too that they got SCA involved and SCA is too happy to get the cash and the "consultation" fees and have a bigger company to sell its branded stuff to.
AHY Price at posting:
$1.65 Sentiment: Sell Disclosure: Not Held
