Author Topic: PRXI - Premier Exhibitions  (Read 33035 times)

asw310

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PRXI - Premier Exhibitions
« on: October 09, 2013, 06:42:46 PM »
http://boardvote.com/symbol/PRXI/communique/461106

The story with Premier Exhibitions is pretty simple and well known, but its not pretty at the moment. The company owns the RMS Titantic assets estimated to be worth substantially more than the current market cap. PRXI is having trouble with its operating business, but it also doesn't seem to be burning through tons of cash either.

With the termination of the LOI with Hampton Roads for the titantic assets today, I imagine the stock will be trading much lower than its current price of $1.50 tomorrow morning when the market opens.

Certainly intriguing. I know a lot of special situation type and value guys have been interested in the stock for quite a long time now.


ragnarisapirate

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Re: PRXI - Premier Exhibitions
« Reply #1 on: October 09, 2013, 07:49:50 PM »
The fact that it seems widely accepted that the price will fall makes me think it won't... If you look at when Seller's distributed shares, there was a lot of thought that the price would fall- but it didn't really.

That said, I am one of the value guys that is really interested in the stock.

-Jeff, the contrarian.

krazeenyc

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Re: PRXI - Premier Exhibitions
« Reply #2 on: October 09, 2013, 09:31:39 PM »
The fact that it seems widely accepted that the price will fall makes me think it won't... If you look at when Seller's distributed shares, there was a lot of thought that the price would fall- but it didn't really.

That said, I am one of the value guys that is really interested in the stock.

-Jeff, the contrarian.

Are you already invested in it? I've read a bunch of stuff on PRXI a while back, and a bit rusty of the facts. But I wonder who exactly will buy these Titanic assets given the strict rules of ownership.

My understanding is the assets were appraised at appx $180 million. But that there are a lot of restricitions regarding the assets such as the fact that they they cannot be sold piece meal. And that they essentially have to be displayed to the public.  My hesitation for buying was that these assets seemed encumbered in that the available pool of buyers that would buy these assets under these restrictions seem very small. 

Do you own the company for any reason other than the titanic assets? Can these rules ever be lifted under some sort of hardship rule?
d

ragnarisapirate

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Re: PRXI - Premier Exhibitions
« Reply #3 on: October 09, 2013, 10:08:56 PM »
The fact that it seems widely accepted that the price will fall makes me think it won't... If you look at when Seller's distributed shares, there was a lot of thought that the price would fall- but it didn't really.

That said, I am one of the value guys that is really interested in the stock.

-Jeff, the contrarian.

Are you already invested in it? I've read a bunch of stuff on PRXI a while back, and a bit rusty of the facts. But I wonder who exactly will buy these Titanic assets given the strict rules of ownership.

My understanding is the assets were appraised at appx $180 million. But that there are a lot of restricitions regarding the assets such as the fact that they they cannot be sold piece meal. And that they essentially have to be displayed to the public.  My hesitation for buying was that these assets seemed encumbered in that the available pool of buyers that would buy these assets under these restrictions seem very small. 

Do you own the company for any reason other than the titanic assets? Can these rules ever be lifted under some sort of hardship rule?
d

I do not own the stock, but did a bit ago. The appraisal is probably wildly high, but that doesn't make them an un-interesting asset. Basically, I am willing to pay a good bit less than what I think the Titanic stuff could get, then take the return of capital from the company so that I don't have any real cost basis, then get whatever is left for free, less the time that I had the money tied up.

I have no idea if they could get the court to approve something other than what they have (which, as you point out, makes the assets worth a lot less) and as such, don't see myself paying nearly what we are trading at for the stock.

If this thing trades for, say, 1/2 what it presently is, then that seems REALLY interesting to me. Maybe a pipe dream, but, maybe not. The real problem here is that the assets are what makes this thing valuable, but we have little to base the value on- a simple cash flow of them makes them worth a lot less than that appraisal- that's why Premier isn't doing them as an exhibit... right?

DTEJD1997

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Re: PRXI - Premier Exhibitions
« Reply #4 on: October 10, 2013, 05:10:51 AM »
WOW:

I just read the transcript from the latest quarter's earnings. 

The shareholders are in revolt!

To say they are disgruntled is an understatement.

It was also interesting to see that management and the board of directors have "learned" a lot about the process of negotiating and selling the assets. 

These dudes are "learning"?  I thought they were supposed to already KNOW what to do.  If you are the CEO or upper level management, you aren't "learning on the job".  You are supposed to know what to do.

I have no confidence in management after reading that transcript.  The results from the "sale" of the Titanic assets has been an absolute disaster and fiasco.

Management appears quite adept at lowering value, not creating it.

At $1.50/share, I'm wondering if this thing isn't wildly overvalued?

xtreeq

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Re: PRXI - Premier Exhibitions
« Reply #5 on: October 10, 2013, 05:40:16 AM »
How well are management's incentives lined up with shareholders' ? That's the key in my opinion.

A second variable is time from harvesting the assets to returning the funds to shareholders as we must discount for time value .... anyone with insights on this?

SFValue

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Re: PRXI - Premier Exhibitions
« Reply #6 on: October 10, 2013, 05:54:18 AM »
WOW:

I just read the transcript from the latest quarter's earnings. 

The shareholders are in revolt!

To say they are disgruntled is an understatement.

It was also interesting to see that management and the board of directors have "learned" a lot about the process of negotiating and selling the assets. 

These dudes are "learning"?  I thought they were supposed to already KNOW what to do.  If you are the CEO or upper level management, you aren't "learning on the job".  You are supposed to know what to do.

I have no confidence in management after reading that transcript.  The results from the "sale" of the Titanic assets has been an absolute disaster and fiasco.

Management appears quite adept at lowering value, not creating it.

At $1.50/share, I'm wondering if this thing isn't wildly overvalued?

The value here is, or is not, in the monetization of the assets.  When they say "learning" seems to me they are talking about a deal for the assets, which, is pretty obvious now, they did not know how to handle. Capital allocation or in this case doing a complex deal is not a common trait among CEOs (or upper management), unfortunately.

They have been trying to sell the assets for aprox. 2 years, by now they must have an idea of what the appetite (if any) is there for them. 

they accepted a non binding LOI for the amount they were looking for (appraisal value) which fell through due to funding.  the question is are there any well funded groups with lower offers? again, they must have an idea by now.

they will (they said) spend aprox. 2 mill on share buybacks. The background of Sellers (chairman) and the CEO (was the COO of sellers hedge fund) is in investments, do they understand that the repurchases make sense only if done below IV or NAV or whatever you want to call it, and more importantly, the IV or NAV of this is almost solely the realizable value of those assets?





krazeenyc

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Re: PRXI - Premier Exhibitions
« Reply #7 on: October 10, 2013, 07:01:44 AM »
Imagine if owned a wonderful 6 Bedroom House right at Long Beach in California. You are right on the beach, the house is up to date -- it has everything you'd want.  Under normal market conditions this house would sell for $7 million dollars. However the owners are selling it for the bargain price of $6 million but wait -- there are some catches.

1) You can't live in it
2) You can't rent it out (long or short term)
3) You are required to allow everyone who wants to visit a chance to come inside and look around -- you can charge admission for this.
4) and oh yeah, you're still on the hook for property taxes and other upkeep costs for the house.

Who in their right mind is going to buy this house? This is what I've always thought of the RMS Titanic Assets owned by PRXI.  If there is something that I'm missing about why this asset will be moved near the assessed value -- I'd love to hear it -- b/c it'd make us all a tidy profit.

SFValue

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Re: PRXI - Premier Exhibitions
« Reply #8 on: October 10, 2013, 07:05:37 AM »
Imagine if owned a wonderful 6 Bedroom House right at Long Beach in California. You are right on the beach, the house is up to date -- it has everything you'd want.  Under normal market conditions this house would sell for $7 million dollars. However the owners are selling it for the bargain price of $6 million but wait -- there are some catches.

1) You can't live in it
2) You can't rent it out (long or short term)
3) You are required to allow everyone who wants to visit a chance to come inside and look around -- you can charge admission for this.
4) and oh yeah, you're still on the hook for property taxes and other upkeep costs for the house.

Who in their right mind is going to buy this house? This is what I've always thought of the RMS Titanic Assets owned by PRXI.  If there is something that I'm missing about why this asset will be moved near the assessed value -- I'd love to hear it -- b/c it'd make us all a tidy profit.

half off? free call on judge changing terms? I agree, but then again, never understood the art world

APG12

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Re: PRXI - Premier Exhibitions
« Reply #9 on: October 10, 2013, 08:35:17 AM »
Imagine if owned a wonderful 6 Bedroom House right at Long Beach in California. You are right on the beach, the house is up to date -- it has everything you'd want.  Under normal market conditions this house would sell for $7 million dollars. However the owners are selling it for the bargain price of $6 million but wait -- there are some catches.

1) You can't live in it
2) You can't rent it out (long or short term)
3) You are required to allow everyone who wants to visit a chance to come inside and look around -- you can charge admission for this.
4) and oh yeah, you're still on the hook for property taxes and other upkeep costs for the house.

Who in their right mind is going to buy this house? This is what I've always thought of the RMS Titanic Assets owned by PRXI.  If there is something that I'm missing about why this asset will be moved near the assessed value -- I'd love to hear it -- b/c it'd make us all a tidy profit.

I don't really get your analogy. You can walk away and go buy another house but there's only one Titanic. Value investors don't like to invest in assets that do not produce cash flow, but I think this bias is a mistake. Assets are assets whether they produce cash or not. In any event, I get your point that the required terms are too onerous.