LC Posted March 11, 2013 Share Posted March 11, 2013 There is a small (like, $300 worth of small) special situation occurring with Fortune Industries. Here's the link to the SEC filing to get right to it: http://www.sec.gov/Archives/edgar/data/851249/000114420413013993/v337559_sc13e3a.htm The meat and potatoes is here: Upon the completion of the merger, each outstanding share of Common Stock owned by beneficial or record holders of less than 501 Shares on March 26, 2012 and who continue to own those shares of Common Stock on the effective date of the Merger (the “Small Block Holders”) will be converted into the right to receive $0.61 in cash, without interest and less any applicable withholding taxes. EDIT: Shareholders as of March 26, 2012! Shares trade at $0.23 as of today, so for $115 you will receive $305 upon completion of the merger. The risks are how long the merger takes and whether it does in fact go through, but for such a small amount it seems like a good risk/reward. All you big dogs (I'm looking at you, Eric) can move right on past this post, but for those trying to get their feet wet with special situations or managing small accounts, it's a nice little opportunity. Link to comment Share on other sites More sharing options...
Matson125 Posted March 11, 2013 Share Posted March 11, 2013 The docs show the record date to hold shares is March 26, 2012. Has anyone had any experience buying these types of situations past the record date and still tending their shares? Link to comment Share on other sites More sharing options...
oddballstocks Posted March 11, 2013 Share Posted March 11, 2013 Been in this one a while. The history is crazy, management literally stealing the company from shareholders. Yes the date is March 26th 2012, but given what's happened since the first agreement there's a lot of support for the fact that this date will be disallowed. I will be filing a complaint with the SEC regarding Fortune in the next few days. If not illegal what management is doing with the going private at least is not allowable. Of course as anyone knows just because something is illegal or disallowed doesn't mean it won't happen. Link to comment Share on other sites More sharing options...
Kraven Posted March 11, 2013 Share Posted March 11, 2013 I am familiar with this one too. As Oddball says, the history is crazy. This "merger" has been in the works since early last year. Then it got sidetracked as they attempted to essentially trade companies with a nursing home provider. That fell apart and they simply picked up the old merger/going dark deal as if nothing happened and re-filed it, same dates and all. Management is definitely stealing the company. That being said, my personal view is there is value here. It's a tricky situation. The company and their advisors argue that shareholders basically will have the same slice of the economics they had before, and arguably that is true. But this affords management the ability to take the bulk of the company for themselves. So it's terrible in that respect. I still believe though that if I hold my nose there is some value here and have a small position and don't want to be cashed out. I will ride it and see what happens. It will be interesting to see if the SEC takes action after getting notice. Link to comment Share on other sites More sharing options...
compoundinglife Posted March 11, 2013 Share Posted March 11, 2013 Been in this one a while. The history is crazy, management literally stealing the company from shareholders. Yes the date is March 26th 2012, but given what's happened since the first agreement there's a lot of support for the fact that this date will be disallowed. I will be filing a complaint with the SEC regarding Fortune in the next few days. If not illegal what management is doing with the going private at least is not allowable. Of course as anyone knows just because something is illegal or disallowed doesn't mean it won't happen. Do you have boilerplate text one could use for the complaint? Do you think more complaints might motivate them more? Link to comment Share on other sites More sharing options...
CONeal Posted March 11, 2013 Share Posted March 11, 2013 Been in this one a while. The history is crazy, management literally stealing the company from shareholders. Yes the date is March 26th 2012, but given what's happened since the first agreement there's a lot of support for the fact that this date will be disallowed. I will be filing a complaint with the SEC regarding Fortune in the next few days. If not illegal what management is doing with the going private at least is not allowable. Of course as anyone knows just because something is illegal or disallowed doesn't mean it won't happen. Do you have boilerplate text one could use for the complaint? Do you think more complaints might motivate them more? +1 bought a couple of shares today for the hell of it. Willing to send out a letter if you think it will help. Link to comment Share on other sites More sharing options...
compoundinglife Posted March 11, 2013 Share Posted March 11, 2013 Been in this one a while. The history is crazy, management literally stealing the company from shareholders. Yes the date is March 26th 2012, but given what's happened since the first agreement there's a lot of support for the fact that this date will be disallowed. I will be filing a complaint with the SEC regarding Fortune in the next few days. If not illegal what management is doing with the going private at least is not allowable. Of course as anyone knows just because something is illegal or disallowed doesn't mean it won't happen. Do you have boilerplate text one could use for the complaint? Do you think more complaints might motivate them more? +1 bought a couple of shares today for the hell of it. Willing to send out a letter if you think it will help. Yeah I picked some up across my 5 different accounts before I noticed the 2012 in the record date :P So more than happy to send a letter or do whatever. Link to comment Share on other sites More sharing options...
LC Posted March 11, 2013 Author Share Posted March 11, 2013 The docs show the record date to hold shares is March 26, 2012. Has anyone had any experience buying these types of situations past the record date and still tending their shares? Mother-flipper...My eyes glazed over it as 2013...well there's a $100 lesson on re-reading terms of special situations! Ah well, do you guys think another letter to the SEC will help? LOL Link to comment Share on other sites More sharing options...
Hielko Posted March 11, 2013 Share Posted March 11, 2013 I bought some despite knowing about the 2012 record date... just have to see what happens. Link to comment Share on other sites More sharing options...
CONeal Posted March 11, 2013 Share Posted March 11, 2013 I bought knowing about the 2012 date. At a min I thnk the date would need to change. There is way to much bullshit with this one the way it stands. Worst case scenario they have to do something with the shares I own. Even of it's throwning me under the bus. Link to comment Share on other sites More sharing options...
rmitz Posted March 12, 2013 Share Posted March 12, 2013 This article certainly seems to imply that the offer will still stand. Nothing for sure, of course. I haven't done an evaluation of actually going long in a bigger way. http://www.ibj.com/fortune-industries-set-to-accept-133m-buyout-offer/PARAMS/article/39738 Link to comment Share on other sites More sharing options...
oddballstocks Posted March 12, 2013 Share Posted March 12, 2013 Management is going to try to push this through, the IBJ article is essentially stating what is in the filings. I filed an SEC complaint, I'd recommend everyone do so. I'm not going to post a form letter because I believe the SEC ignores submissions where the text is the same. There's a small box describing what the problem is, use your own words, here is the essence of what I stated: 1) The company effected a going dark transaction a year ago using the date March 26th as the cutoff. They then discarded this transaction, and engaged in another one that was abandoned. Recently they decided to re-initiate the first one, yet the dates and terms weren't updated to reflect current conditions. 2) Management who owns almost no stake in this company is taking their share from 0% to 92% through this transaction. There are a TON of other issues, but these are the main ones. Hopefully this gets someone's ear at the SEC. Link to comment Share on other sites More sharing options...
Hielko Posted March 18, 2013 Share Posted March 18, 2013 I must be missing something, but why is it up 180%? Link to comment Share on other sites More sharing options...
Hielko Posted March 18, 2013 Share Posted March 18, 2013 No idea wtf is going on, but sold my shares... Link to comment Share on other sites More sharing options...
CONeal Posted March 18, 2013 Share Posted March 18, 2013 Yippee, came through afterall. thanks for the heads up LC Link to comment Share on other sites More sharing options...
LC Posted March 18, 2013 Author Share Posted March 18, 2013 Guys, I have no idea. Just sold out here as well. That said I am upset for purchasing the shares in the first place. I misread the date on the amended filing. This was total luck. Sorry for dragging people into this, I am extremely grateful that we took advantage of Mr. Market and got out OK. Link to comment Share on other sites More sharing options...
Hielko Posted March 18, 2013 Share Posted March 18, 2013 Sometimes it's better to be lucky than good ;) But think it's some kind of pump and dump, from Twitter: Dailypennystocks.com announces $FFI as 3/18/2013 promo.Get the detailed promo alert at http://www.ThePUMPTracker.com #pennystocks Link to comment Share on other sites More sharing options...
oddballstocks Posted March 18, 2013 Share Posted March 18, 2013 Dumped all my shares at $.69 as well! This is actually the second time I did this, I purchased on the first odd-lot tender at $.20 or so, then on word of the cancellation it jumped to $.50, I sold. Then I got back in again at $.20 and sold again today. I think I've made more on this odd-lot tender that never happened than a few other microcap tenders combined. Link to comment Share on other sites More sharing options...
compoundinglife Posted March 18, 2013 Share Posted March 18, 2013 Managed to get out in all my accounts. For small tenders and going private stuff like this I quickly skim the details and pull the trigger and the net result has been good over time. If it requires more capital I would spend more time on it. But yeah shame on me for not paying attention to the year. Thanks for the heads up. I would not have checked my account unless I got an email from the board. Link to comment Share on other sites More sharing options...
compoundinglife Posted March 18, 2013 Share Posted March 18, 2013 Dumped all my shares at $.69 as well! This is actually the second time I did this, I purchased on the first odd-lot tender at $.20 or so, then on word of the cancellation it jumped to $.50, I sold. Then I got back in again at $.20 and sold again today. I think I've made more on this odd-lot tender that never happened than a few other microcap tenders combined. Heh. There was a net-net I owned in 2008 or 2009 that was a liquidating biotech firm. They had worked a drug that was being used in an experimental AIDs treatment, however they sold all rights to the drug and profits to someone else. They stood to gain nothing from this news but the stock rocketed up way past the liquidation value and I sold it. Link to comment Share on other sites More sharing options...
Hielko Posted March 18, 2013 Share Posted March 18, 2013 Dumped all my shares at $.69 as well! This is actually the second time I did this, I purchased on the first odd-lot tender at $.20 or so, then on word of the cancellation it jumped to $.50, I sold. Then I got back in again at $.20 and sold again today. I think I've made more on this odd-lot tender that never happened than a few other microcap tenders combined. Same here, and wouldn't surprise me if we get another shot at this soon. Link to comment Share on other sites More sharing options...
oddballstocks Posted March 18, 2013 Share Posted March 18, 2013 Unless it's the company buying I have a feeling we'll know who was buying here today. 1.3m shares traded so far, that's well over the 5% reporting threshold. Now for conspiracy plot time, anyone thing this was the company buying out the odd-lot holders as a way to ram the going private through? Put a high bid out there for shares, people holding 500 shares are happy for receiving the premium, the company still goes private.. Alternatively there's some investor who's looking at their fills and wondering why they have so many 500 share executions. Link to comment Share on other sites More sharing options...
Hielko Posted March 18, 2013 Share Posted March 18, 2013 Would be illegal for the company to be buying, and it would be stupid for them to do that since it's easy to catch them. It would probably also not help in reducing the number of small shareholders significantly, I would bet that a large number of those <500 share positions where people are shareholder of record is mostly stuff that people have forgotten about. And 1.3M shares traded yes, but how much of that volume was from selling and buying the same shares? Link to comment Share on other sites More sharing options...
Kraven Posted March 18, 2013 Share Posted March 18, 2013 Guys, I have no idea. Just sold out here as well. That said I am upset for purchasing the shares in the first place. I misread the date on the amended filing. This was total luck. Sorry for dragging people into this, I am extremely grateful that we took advantage of Mr. Market and got out OK. There was more value here than people gave credit for. Might have been a cigar butt in some ways, but I believed there to be 2 puffs left. I sold though too. It went way past where I thought IV was. Link to comment Share on other sites More sharing options...
CONeal Posted March 18, 2013 Share Posted March 18, 2013 Looks like the twitter theory maybe correct. Release from FFI regarding trading. http://finance.yahoo.com/news/ffi-comments-unusual-trading-activity-153500591.html Link to comment Share on other sites More sharing options...
Recommended Posts
Create an account or sign in to comment
You need to be a member in order to leave a comment
Create an account
Sign up for a new account in our community. It's easy!
Register a new accountSign in
Already have an account? Sign in here.
Sign In Now