LowIQinvestor Posted May 10, 2019 Share Posted May 10, 2019 Former Chairman who sold his RE holdings to SYTE is looking to sell shares: https://www.sec.gov/Archives/edgar/data/1096934/000114420419024708/tv521094_144.htm Link to comment Share on other sites More sharing options...
Foreign Tuffett Posted May 10, 2019 Share Posted May 10, 2019 Is anyone else surprised the stock didn't go down after this week's filings? It looks like volume has been minimal over the last few days. I think it's fait accompli that the stock goes lower once we see more robust price discovery. Link to comment Share on other sites More sharing options...
LowIQinvestor Posted May 15, 2019 Share Posted May 15, 2019 Nothing To See Here- Sitestar/Enterprise Diversified, Steven Kiel And The Case Of The Disappearing Management Team: https://www.inelegantinvestor.com/2019/05/15/nothing-to-see-here-sitestar-enterprise-diversified-steven-kiel-and-the-case-of-the-disappearing-management-team/ Link to comment Share on other sites More sharing options...
patientcapital Posted May 16, 2019 Share Posted May 16, 2019 The parallels between this company and Biglari Holdings are almost too much... Link to comment Share on other sites More sharing options...
Tim Eriksen Posted May 16, 2019 Share Posted May 16, 2019 The parallels between this company and Biglari Holdings are almost too much... How so? Biglari deceived shareholders and has personally benefited at the expense of shareholders. Kiel has not done either. Yes they made a bad decision in HVAC, had a significant miscommunication with Moore in Mt Melrose, and parted ways with the CEO and COO. Operational issues are not the same thing as ethical issues. Link to comment Share on other sites More sharing options...
Guest roark33 Posted May 16, 2019 Share Posted May 16, 2019 I am certainly not a huge fan of SYTE, but I don't think they have been unethical unless you think they publicly touted an operational strategy that they privately thought had little chance of success. Unethical or ignorant....?? Link to comment Share on other sites More sharing options...
rkbabang Posted May 16, 2019 Share Posted May 16, 2019 Biglari is a liar and a thief who does everything in his power to personally profit at the expense of BH shareholders. I don't see any parallels at all between the two. Link to comment Share on other sites More sharing options...
SmallCap Posted May 16, 2019 Author Share Posted May 16, 2019 What exactly was the miscommunication with Moore? Link to comment Share on other sites More sharing options...
LowIQinvestor Posted May 16, 2019 Share Posted May 16, 2019 how do does one generate $182k in rental revenue & generate a loss of $213k ( Q1 2019 ) This will not end well. Link to comment Share on other sites More sharing options...
Tim Eriksen Posted May 16, 2019 Share Posted May 16, 2019 What exactly was the miscommunication with Moore? It seems he understood freedom to ramp up the business (acquisitions and support structure) whereas management did not. Link to comment Share on other sites More sharing options...
InelegantInvestor Posted May 16, 2019 Share Posted May 16, 2019 What exactly was the miscommunication with Moore? It seems he understood freedom to ramp up the business (acquisitions and support structure) whereas management did not. Where might he have gotten that idea? https://www.sec.gov/Archives/edgar/data/1096934/000156459017024810/syte-ex992_9.htm "Sitestar will add significant working capital to the business and provide Jeff with the freedom to allocate that capital" "Sitestar intends to commit the next $10 million of cash that we internally generate to the subsidiary. Some of that will come from debt that we will raise at the corporate level. The initial allocation to the subsidiary will likely be in the range of $3 million. Jeff will not earn a salary. He will receive an annual bonus based on book value growth with a high-water mark." Link to comment Share on other sites More sharing options...
rkbabang Posted May 16, 2019 Share Posted May 16, 2019 What exactly was the miscommunication with Moore? It seems he understood freedom to ramp up the business (acquisitions and support structure) whereas management did not. Where might he have gotten that idea? https://www.sec.gov/Archives/edgar/data/1096934/000156459017024810/syte-ex992_9.htm "Sitestar will add significant working capital to the business and provide Jeff with the freedom to allocate that capital" "Sitestar intends to commit the next $10 million of cash that we internally generate to the subsidiary. Some of that will come from debt that we will raise at the corporate level. The initial allocation to the subsidiary will likely be in the range of $3 million. Jeff will not earn a salary. He will receive an annual bonus based on book value growth with a high-water mark." I think you can make an argument that management was naive, inexperienced, or, at worst, incompetent. I think it is pretty hard to argue that they have been lying to shareholders or intentionally committing any kind of fraud. Link to comment Share on other sites More sharing options...
Read the Footnotes Posted May 16, 2019 Share Posted May 16, 2019 What exactly was the miscommunication with Moore? It seems he understood freedom to ramp up the business (acquisitions and support structure) whereas management did not. Where might he have gotten that idea? https://www.sec.gov/Archives/edgar/data/1096934/000156459017024810/syte-ex992_9.htm "Sitestar will add significant working capital to the business and provide Jeff with the freedom to allocate that capital" "Sitestar intends to commit the next $10 million of cash that we internally generate to the subsidiary. Some of that will come from debt that we will raise at the corporate level. The initial allocation to the subsidiary will likely be in the range of $3 million. Jeff will not earn a salary. He will receive an annual bonus based on book value growth with a high-water mark." I think you can make an argument that management was naive, inexperienced, or, at worst, incompetent. I think it is pretty hard to argue that they have been lying to shareholders or intentionally committing any kind of fraud. Time will prove which of these diametrically opposed narratives is closest to the truth, but here are some thoughts. I think you have to incorporate many issues to get closer to reality. I will make an abbreviated attempt that is based in part upon the assumptions and guesses of an outsider: The new management discovered many more issues than expected after taking over the company and getting access to information including that The business and former management was more troubled than expected. The new management may have been very accomplished, well intentioned and highly ethical, but inexperienced at the exact challenges before them. Add to this the issues surrounding being a very small public company that made a couple of material blunders soon after taking over. If you accept the narrative above, it's easy to explain today's situation while retaining respect for those that were involved. Link to comment Share on other sites More sharing options...
Read the Footnotes Posted May 16, 2019 Share Posted May 16, 2019 What exactly was the miscommunication with Moore? It seems he understood freedom to ramp up the business (acquisitions and support structure) whereas management did not. Where might he have gotten that idea? https://www.sec.gov/Archives/edgar/data/1096934/000156459017024810/syte-ex992_9.htm "Sitestar will add significant working capital to the business and provide Jeff with the freedom to allocate that capital" "Sitestar intends to commit the next $10 million of cash that we internally generate to the subsidiary. Some of that will come from debt that we will raise at the corporate level. The initial allocation to the subsidiary will likely be in the range of $3 million. Jeff will not earn a salary. He will receive an annual bonus based on book value growth with a high-water mark." InelegentInvestor, from having spoken to you, I know you are a very talented analyst. It's good to see you contributing to discussions again. If I may change the subject a bit, I am wondering if you have thoughts about Sardar Biglari? Please feel free to switch the conversation to a more appropriate thread, if you respond to this question. RtF Link to comment Share on other sites More sharing options...
NoCalledStrikes Posted May 16, 2019 Share Posted May 16, 2019 The parallels between this company and Biglari Holdings are almost too much... This is nonsensical. Biglari takes advantage of shareholders at every turn while Kiel bends over backwards to put SYTE shareholders in front of his own interests. It is a free market, so feel free to criticize Steve’s business decisions, but to compare Steve’s integrity to one of the most shameless extortionists of our generation, is just too damn much. Link to comment Share on other sites More sharing options...
InelegantInvestor Posted May 16, 2019 Share Posted May 16, 2019 What exactly was the miscommunication with Moore? It seems he understood freedom to ramp up the business (acquisitions and support structure) whereas management did not. Where might he have gotten that idea? https://www.sec.gov/Archives/edgar/data/1096934/000156459017024810/syte-ex992_9.htm "Sitestar will add significant working capital to the business and provide Jeff with the freedom to allocate that capital" "Sitestar intends to commit the next $10 million of cash that we internally generate to the subsidiary. Some of that will come from debt that we will raise at the corporate level. The initial allocation to the subsidiary will likely be in the range of $3 million. Jeff will not earn a salary. He will receive an annual bonus based on book value growth with a high-water mark." I think you can make an argument that management was naive, inexperienced, or, at worst, incompetent. I think it is pretty hard to argue that they have been lying to shareholders or intentionally committing any kind of fraud. I want to be very clear. I have not accused anyone here of fraud. Nor do I think that this is nearly the same as Biglari. Link to comment Share on other sites More sharing options...
InelegantInvestor Posted May 16, 2019 Share Posted May 16, 2019 What exactly was the miscommunication with Moore? It seems he understood freedom to ramp up the business (acquisitions and support structure) whereas management did not. Where might he have gotten that idea? https://www.sec.gov/Archives/edgar/data/1096934/000156459017024810/syte-ex992_9.htm "Sitestar will add significant working capital to the business and provide Jeff with the freedom to allocate that capital" "Sitestar intends to commit the next $10 million of cash that we internally generate to the subsidiary. Some of that will come from debt that we will raise at the corporate level. The initial allocation to the subsidiary will likely be in the range of $3 million. Jeff will not earn a salary. He will receive an annual bonus based on book value growth with a high-water mark." InelegentInvestor, from having spoken to you, I know you are a very talented analyst. It's good to see you contributing to discussions again. If I may change the subject a bit, I am wondering if you have thoughts about Sardar Biglari? Please feel free to switch the conversation to a more appropriate thread, if you respond to this question. RtF Briefly, I have written quite a bit about Biglari over the years: https://www.inelegantinvestor.com/?s=biglari https://www.inelegantinvestor.com/2016/03/28/sardar-biglari-serial-defamation-victim/ https://www.inelegantinvestor.com/2015/12/14/biglari-continues-to-pursue-revenge-against-swenson-on-companys-dime/ https://www.inelegantinvestor.com/2015/12/05/biglari-stock-price-decreases-while-ceo-focuses-on-new-strategy-of-creeping-out-models/ https://www.inelegantinvestor.com/2012/08/15/sardar-biglari-adds-another-puppet-to-biglari-holdings-board-fails-to-disclose-ties/ https://www.inelegantinvestor.com/2011/02/08/biglari-continues-to-quack-wear-duck-costume/ Suffice to say that time has not enhanced my opinion of Mr. Biglari. The latest shareholder meeting was an absolute farce. He played a role in investors' fantasies of finding a young Buffett and used it to enrich himself. He will continue to enrich himself at the expense of anyone who does business with him or invests in his company. There is no price at which one could buy BH. I do think, to make this topical, that there is a price at which one could buy SYTE. But it is far below recent trades. Link to comment Share on other sites More sharing options...
Tim Eriksen Posted May 28, 2019 Share Posted May 28, 2019 Sitestar (Enterprise Diversified) sold its HVAC operations in Arizona. They will receive a revenue royalty over the next five years. https://finance.yahoo.com/news/enterprise-diversified-announces-sale-home-211600304.html Link to comment Share on other sites More sharing options...
Spekulatius Posted May 28, 2019 Share Posted May 28, 2019 Sitestar (Enterprise Diversified) sold its HVAC operations in Arizona. They will receive a revenue royalty over the next five years. https://finance.yahoo.com/news/enterprise-diversified-announces-sale-home-211600304.html Good move. I think HVAC was bought for roughly $2M and I guess the royalty stream is probably going to bring in $0.5-0.7M (a cumulative of 0.275x revenues, but those have been dropping rapidly), so I estimate a $1.3M-1.5M writeoff. Still better than nothing and the company needs to cash. Link to comment Share on other sites More sharing options...
InelegantInvestor Posted May 28, 2019 Share Posted May 28, 2019 Sitestar (Enterprise Diversified) sold its HVAC operations in Arizona. They will receive a revenue royalty over the next five years. https://finance.yahoo.com/news/enterprise-diversified-announces-sale-home-211600304.html Good move. I think HVAC was bought for roughly $2M and I guess the royalty stream is probably going to bring in $0.5-0.7M (a cumulative of 0.275x revenues, but those have been dropping rapidly), so I estimate a $1.3M-1.5M writeoff. Still better than nothing and the company needs to cash. Zero cash upfront. I think your estimate of royalty stream is too high as well. Good that they're out of this disaster but even in the PR about it, there's no acknowledgement that this investment was disappointing. No contrition. No reflection. No discussion of how this impacts financials. Implies that it's all great and they're doing this so they can focus on Willow Oak. Link to comment Share on other sites More sharing options...
Guest roark33 Posted May 28, 2019 Share Posted May 28, 2019 This is totally like Buffett since his first investment in Berkshire Hathaway was a total disaster and mistake. You can't be like Buffett if you don't make a horrible first investment. They should really change their ticker to HVAC to remind themselves of this point. Link to comment Share on other sites More sharing options...
LowIQinvestor Posted June 4, 2019 Share Posted June 4, 2019 Jeff Moore selling: https://www.sec.gov/Archives/edgar/data/1096934/000114420419029475/xslF345X03/tv522986_form4.xml Link to comment Share on other sites More sharing options...
Spekulatius Posted June 4, 2019 Share Posted June 4, 2019 Jeff Moore selling: https://www.sec.gov/Archives/edgar/data/1096934/000114420419029475/xslF345X03/tv522986_form4.xml Steven Kiel US on the other side and buying, FWIW. Link to comment Share on other sites More sharing options...
rkbabang Posted June 10, 2019 Share Posted June 10, 2019 They should really change their ticker to HVAC to remind themselves of this point. That would be great. Maybe some of us shareholders should get together to get the ticker change on the next proxy ballot. A hostile takeover of the ticker symbol. Link to comment Share on other sites More sharing options...
oddballstocks Posted July 3, 2019 Share Posted July 3, 2019 Surprised no one is talking about this: https://www.sec.gov/Archives/edgar/data/1096934/000143774919013461/syte20190703_8k.htm Link to comment Share on other sites More sharing options...
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