EGMI Update: Sort of
I really don’t have an update, so I guess that is the update. I know there was a board meeting late last week but havn’t talked to anyone on what decisions were made. I’m still holding my position since there is no reason to sell when the company is growing EPS 40% yr/yr, trading at 7x 2009 EPS, has $12+ million in cash, no debt, and they reaffirmed guidance. I would probably be buying if it wasn’t for having a mountain of shares already. In situations like these doing nothing is sometimes the best thing (EGMI Management sure is good at this..hardy har har 
). Try not to refresh your quotes every second, find a hobby, buy a dog, turn off your computer etc. A couple encouraging words from management, and the stock likely rebounds hard.
Disclosure: LONG EGMI
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Ian I was worried because it seemed like EGMI held up until 14:30 Friday then tanked. I heard that the board meeting was Friday so I that maybe some bad news leaked out. I’m like you “sitting on a mountain of shares” It just seems like they are reluctant to update on CFO, proxy, board members. I like the fundamentals and love the Poken, but one thing that I have found to be true is this there is a reason for price movement of a stock but you may not know the reason for a while. Thanks for your updates.
As I have state before, I think it can be traced back to the Lord Steinberg estate. As you know, British estate taxes are heavy, and the offer to the board may have to buy his shares or were dumping. We’ll see shortly.
No, he was over 10% holder, so if the estate sells 1 share they have to file a form 4. His estate will be held up for many more months.
IC
I’m thinking that egmi price is being artificaly being driven down, to my suprise short intrest isstill very low, so if Sykes or any one else is shorting heavily they are covering quickly and not showing up. My concern is if we get any positive news there would be a mass rush to the exit. We should be at least at 2.50 and as high as 5.50. EGMI holds a large intrest in 2 other companies, have to see whats up with that there traded on som quasi public market. (forgot what it was, have to check). A take over offer would no suprise me.
No I don’t think it has been artificially driven down. The company has done a terrible job communicating, and in a market like we’ve had the last week in particular, stocks go down. I agree the fundamentals of the company warrant a stock price at least double the current one. When management starts communicating is when the stock price goes back up.
IC
2x average volume but selling is subsiding. Called Grannus left a message, called the company they told me to call Grannus. Something I noticed Kevin Donovan is no longer listed as a contact for investors. Maybe he is out as CEO (just speculating), I think it’s more then just communicating. sometimes selling begets selling, the stock ran up on so-so volume before the sundance anouncement. So I guess we differ on the plausability of price manupilation.
Nothing would make me happier then to see a management shift. I wouldn’t be surprised by it, or against it.
IC
It will be lntresting to watch the price action going into 2/10/10.
I noticed on their pending announcement KD is listed as a contact. I guess were going thru grinding period you had so elgantly wrote about.
Ian, why do you say you like to see a management shift when Kevin is discussed? I thought you thought of him very highly?. I hope the CC will bring good knews. But the feeling I have is a bad one. Look at ZAGG. It kept going down with no knews before the bad knews was finally announced. Someone always knows something. EGMI dropped by way more than it’s share due to market conditions. I guesses are 1) a deal did not go through 2)Lower rev guidance. I am hoping for good knews though!
Dennis:
The new management team (Kevin/Anna) = Big Cloud No Rain. They have really produced nothing since they have been at the company. The old management team built the company (got us China etc), its revenues, cash, etc, so I imagine they aren’t too happy with the current situation. I would be very happy for the old management team to righten the ship now. Guidance will be fine.
IC
Looks like the deal with Poken fell through or …?
Termination of Joint Venture discussions
http://blog.poken.com/2010/02/01/termination-of-joint-venture-discussions/
Yeah i saw that. Probably a good thing for both companies at this point.
IC
Ian,
Outside of the late Lord Steinberg, whom is on the management team. To me it is kind of faceless. If there is a management change who is pulling the strings? Any idea of whom is on the board?
Lee Cole is the one who built the company from the ground up and who continues build the growth for the future. I know they are working to fill out the board.
IC