InelegantInvestor

They tried that with HVAC and with real estate and would have done better just burning the cash to heat their office.

Almost nothing: "The decision was made to exit the business during the quarter ended June 30, 2019. The operations of Specialty Contracting Group, LLC were considered a component of, and the divestiture reflected a strategic shift in, the Company’s business. As such, Specialty Contracting Group, LLC’s historical operations have been classified as discontinued operations in the Company’s financial statements. The loss from discontinued operations has been determined using a loss recovery approach, as the collection of future royalties is uncertain and a reasonable estimate could not be made. This approach requires that the contingent consideration, the future royalties to be received, be valued at the lesser of the amount of the “probable,” defined as a greater than 50% likelihood, future proceeds or the carrying value of the disposed assets. Due to the unpredictability of the contingent consideration, and management’s inherent lack of control over the buyer’s operations, management determined it would not be reasonable to attempt to value the contingent consideration. This resulted in assigning the contingent consideration a current valuation of zero. As and to the extent any royalties are deemed probable, they will be subsequently recognized as a “recovery from discontinued operations” on the statements of operations and will offset, or recover, the initial loss recorded. Accordingly, during the quarter ended March 31, 2020, an offsetting $11,019 recovery on discontinued operations was recognized within the reported $10,756 of net income from discontinued operations. "

He said you need to adjust to it. I think that the kind of multi-use developments SRG has been pursuing are one form of adjustment. They've halted Capex now, basically and are waiting to see what further adjustments are necessary. Maybe the new demand is for well-located warehouse space. Or whatever. I feel very comfortable with these assets at the current price.

Has anyone looked at this recently? NY is winding down, but JVs seems to have value. Someone has been pushing stock price up recently.

You have more confidence in management than I do. The constant capex in Missouri has been driving me nuts ever since I bought, so I took the gain and moved on. It's easier to improve a good business than a bad one, and they seem hell bent on fixing Missouri. I'd way prefer they acknowledge it was a mistake, shut down/sell, and move the animals/rides to Georgia. Then spend the capex money building a campground, carnival rides, buying an elephant, whatever, to continue improving the great business they already own in GA. Probably has to do with when I bought. I've been in for years, since it was basically insolvent(after MO purchase and proxy fight). Dale cleaned up balance sheet and executed. Made me a lot of money.

I think $.24-$.26 is probably fair value. Remains to be seen whether Texas deal closes(it's just an LOI) and what the financing looks like. If it throws off a million a year in EBITDA like GA, and financing is non-dilutive, it's a great deal. But we have seen no financials thus far. I've been in this a long time and have confidence in management that has delivered for me in a big way, but I wouldn't have aggressively bought at $.26. I have a lot of reasons to hope these guys are right though.

Calhoun is the worst of both worlds, long term board member and also, a Jack Welch-GE guy. The articles around his promotion actually quote Immelt praising him. They need a CEO who gets engineering, not financial engineering.

Hyperbolic pessimism keeps me from assuming the best case. Boeing has consistently underestimated the depth of this problem and the time to fix it. They refused to address it after the first crash. There is nothing to indicate the culture has changed or that their new projections are any more reasonable than their old. If they are right about what they are saying, then maybe it's worth what it's trading for now. But if they aren't, it's worth substantially less. So when I look at this, I see too much uncertainty, likely risk to downside, too hard for me to be confident that I can believe them, and, even if I do, limited upside, certainly in short term. I'd rather buy this derisked 10% higher with a clearer picture than where we are now.

Boeing has already received new orders for 737 MAX since the grounding They received a total of two LOIs in 2019: one from IAG and one from FlyArystan. They had negative net orders for the year. It is unclear how firm those orders are or what BA needed to promise to get them- they are unlikely to be profitable orders. This company is in a lot more trouble than the market is pricing. You said there was a zero chance of new orders. You may very well be right that the market is underestimating how impactful the issue is, but I don't think you are making that case very well. You are just stating it as if it were fact. Castanza is right that BA is not going to $0. If anything, they will merge with LMT or sell off various lines of business. BA earns 50%+ returns on capital which implies a ton of off-balance sheet assets. Assuming normalized returns of 10%, BA's true goodwill value is probably in the range of $80b-$120b (instead of $5b on the books). BA is far from insolvent. I think the question is how big of a hit to margins is this issue and how long will that impact last. That's definitely up for debate. Let me be explicit: those are not solid orders. IAG has a lot of vagueness and came before the extent of the issues was clear. FlyArystan is a startup airline and it is unclear it will ever take delivery on a single plane. I don't think BA's problems are insurmountable, but I do think that the market is vastly underestimating the scale of the problems and what they will cost. BA spent a year building planes that it is parking. That is an enormous amount of inventory build. Once there is a path to approval, how much time and money will it take to get these to delivery. They've stopped production now. The longer it is stopped, the more difficult it is to restart. Will passengers be willing to fly in this plane once it is re-approved? They bet everything on the 737Max. It is the bulk of the commercial business. I understand that you feel I am failing to justify what I am saying, and perhaps that is true. I know that there is an awful lot more smoke here than one would expect given what people are saying the size of the fire is. If they got approval tomorrow the stock would still be overpriced at this level. We are at least 6 months from approval, and, quite likely, longer. We are a long way from this being buyable.

I think zero is unlikely, but possible. It is true that the defense business is hugely profitable. Commercial business is insolvent right now. Is there a point where the government steps in to keep commercial from taking down defense, GM-style? How easy has it been for BA to borrow this $10 billion? How much harder will the next $10 billion be? How about if it happens in a recessionary environment? This should currently be priced somewhere between $100 and $150. I wonder how much of the fact that it's above that is due to its prominence in indexes and ownership by passive funds.

Boeing has already received new orders for 737 MAX since the grounding They received a total of two LOIs in 2019: one from IAG and one from FlyArystan. They had negative net orders for the year. It is unclear how firm those orders are or what BA needed to promise to get them- they are unlikely to be profitable orders. This company is in a lot more trouble than the market is pricing.

This has still not gone below its low of December 2018, though it is finally close. In December 2018, it was still flying these planes and delivering orders. Company is in miles worse shape right now. The $10 billion they are borrowing is the first indication of a liquidity crunch that will only get worse. This needs to go down a great deal more before it makes sense to buy. Remember also, that the current price is 8-10x its 2009 lows. The only thing going for Boeing in commercial is that airlines can't switch their orders to the other supplier and get them any time soon. But they have zero chance of getting new orders anytime soon. What happens as they move through their pipeline? What if Airbus adds another production line? Increasingly Boeing will have to rebate and credit to keep its orders. This will get much, much worse.

All lies and jest, still a man hears what he wants to hear And disregards the rest, hmmmm

I agree that CRCM is interesting. Bought in a few months ago on their big drop.

Chapter 11 filing last night was... unexpected.