There is a middle ground for an activist, I would have thought....

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22/02/18

15:16

Post #: 31261423
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Originally posted by Davisite ↑

It is possible, but only slightly more likely than hell freezing over. As @Teddyward said their MO is not as patient investors looking out for orphan companies a little down on their luck. It is as about as close to certainty as anything on the ASX that they are here for the cash and the only the cash. To get their hands on the cash they need to toss out the current board and management and stop the bleeding.

The selling has pretty much dried up so (only the sharks and true believers seem to be left). It can't be long before they act.

The psychology of doomed companies threads here on HC is very interesting. Some seem to be like SGH where there is a good mix of positive and negative posters, some are like IOT where it is mostly non-holders making fun on the antics of management (very entertaining), to companies like YOW where nearly everyone seems to be positive. On the surface there is no rational reason for this difference. This is why I post.

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There is a middle ground for an activist, I would have thought. Preserve the cash by stopping the bleed, maximise the value of the business either for sale or a market re-rating - then exit to a strategic buyer of their line at a premium. It would be irrational to do anything other than to maximise the value of a $30m a year business, even if that's just readying it for sale.

Although, this being said, if the business can't be brought back quickly to cashflow neutral on a no growth basis... I can't imagine much tolerance for cash burn.

YOW Price at posting: 10.5¢ Sentiment: Buy Disclosure: Held
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