Author Topic: PRXI - Premier Exhibitions  (Read 34177 times)

DTEJD1997

  • Hero Member
  • *****
  • Posts: 1449
Re: PRXI - Premier Exhibitions
« Reply #10 on: October 10, 2013, 08:51:46 AM »
Hey all:

I've got some more thoughts on this.

The problem as I see it is that management's incentives are not really aligned with shareholders.  As was pointed out several times on the conference call, they are getting paid handsomely.  What are the results?

The way they handled the asset sale of the Titanic relics was amateurish at best.  They really got jammed up on that.  YEARS have gone by, with a very poor result.

They are getting paid WAY TOO MUCH with poor results.  If lower level workers performed like this, they would be fired instantly.  Why does upper level management get a pass?

Management sounded completely tone deaf and out of touch on the conference call, saying "we did a good job", "we are learning"....They rightfully got called out for this.

And what is the Viagra deal?  Are they selling Viagra now too?  Has some one hacked their site?  Do they have a problem with a cyber squatter?  It seems to me that their website and Google results would be pretty close to the top of the list of things to be concerned about.  The Viagra problem shows yet again that they are not on top of things.

You add it all up and you've got problem for shareholders.  Time is not the friend of shareholders here.


SFValue

  • Jr. Member
  • **
  • Posts: 98
Re: PRXI - Premier Exhibitions
« Reply #11 on: October 10, 2013, 08:52:41 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.

that's fine, but how do you value it? (circular reference to gold jaja)

premfan

  • Sr. Member
  • ****
  • Posts: 394
Re: PRXI - Premier Exhibitions
« Reply #12 on: October 10, 2013, 09:18:38 AM »
I was owner from late 2009- early 2012.  Here are my thoughts:

- Management has done a very good job in turning the operating business
- Horrible job in trying to deal the assets


Management has ruined any leverage they had by telegraphing how "bad" they want this deal done. Management be like the fonz be cool.  Management has acted needy and the potential buyers know this. If I were management I would put out a press release saying we are no longer willing to deal the titanic assets. We are working on optimizing the asset for  our shareowners.

I haven't followed this company in about a year. It might be time to look at them again.  I feel the main question isn't when the assets will be sold but, what is the normalized earnings for the operating business. 

 


krazeenyc

  • Hero Member
  • *****
  • Posts: 715
Re: PRXI - Premier Exhibitions
« Reply #13 on: October 10, 2013, 09:52:18 AM »
- Management has done a very good job in turning the operating business
- Horrible job in trying to deal the assets


From what I've seen I agree with these 2 statements.

For those who think it's about the management -- the Chairman was Sellers right? Since they owned a bunch of stock, I assume they were highly motivated to move the titanic assets. I actually think they've done a pretty decent job recently with the exhibitions business -- the past year I think they ran into some issues that were out of their control (Hurricane Sandy). They could consider contracting out the job of finding a buyer for these assets... but I don't know who the buyer would be. Ultimately the buyer of the Titanic assets would have to pay 10 figures plus to essentially have their name attached to showcasing these artifacts. You are essentially hoping for a $100 million + donation.

APG12

  • Full Member
  • ***
  • Posts: 221
Re: PRXI - Premier Exhibitions
« Reply #14 on: October 10, 2013, 10:07:15 AM »
that's fine, but how do you value it? (circular reference to gold jaja)

Haha, I knew that was coming. You can't assign an intrinsic value but that doesn't mean it's worthless, that's all I'm saying. It's such a trivial observation that I doubt anyone disagrees.  ;)

Back to PRXI. I once saw someone describe the situation as a value investment that was taking so long that even the value investors were getting out. This seemed spot on to me. I only recently purchased shares so in the event that the assets are monetized, my IRR is going to be better than a lot of other people in this stock. I think that a lot of investors also need to step back and look at the big picture. If your investment doubles in 7 years, you'll have made 10% annualized which is nothing to sneeze at in this low-return environment. Even if the asset sale takes several more years, the IRR is really not going to be as bad as one would imagine after reading that conf call transcript!

So, my conclusion is that while everyone is focused on the timing of the sale, we should be far more focused on the sale price. Shareholders are really pressuring management to make the sale ASAP so let's hope that they don't sacrifice price for speed. There were a number of callers who just wanted them to sell the assets for whatever they can get at the moment. Folks, this company has been failing to execute for far too long but let's not all lose our heads! Extraordinary patience is a requirement to make money in this.

Which brings me to an observation I've made about my own emotional reaction to my investments: it's far easier to be patient and emotionally detached when a stock does not represent a large portion of your investment portfolio (I'm full of trivial observations today haha). Observe Exhibit A: http://seekingalpha.com/user/8467641/comments

ragu

  • Full Member
  • ***
  • Posts: 211
    • Personal investing blog
Re: PRXI - Premier Exhibitions
« Reply #15 on: October 10, 2013, 10:16:18 AM »
I feel the main question isn't when the assets will be sold but, what is the normalized earnings for the operating business.

The only people who'll be in more trouble than those that own this for the assets are those that own it for the operating business.

Best,
Ragu

gg

  • Full Member
  • ***
  • Posts: 222
Re: PRXI - Premier Exhibitions
« Reply #16 on: October 10, 2013, 10:28:25 AM »
I've owned PRXI a few times over the past couple of years, mostly trying to trade on the market's pessimism/optimism on their ability to sell the assets. But one thing I have always had trouble with is that I think that many investors are anchored to the "appraisal" value of the titanic assets of ~$180 million. People often forget that appraisals are done by a hired 3rd party, and when dealing with something so illiquid, unique, and with stringent rules on how the asset can be utilized, there's no real way an appraiser can determine a value here. The only real value indicator is finding someone who will buy it, and seeing what they will pay (non-binding LOIs from non-profit groups who can't come up with the money do not qualify as a legitimate indicator of valuation).

On a side note, I live in Chicago, where we have a couple world-class museums that I visit every once in a while, and I've thought to myself: if one of these museums bought the entire Titanic collection and displayed them, would I really care to go to the museum to see them? The answer is honestly, not really. I am interested in history, art, and science--and I truly enjoy going to the local museums when there are interesting exhibits, and maybe I'm an outlier-- but frankly I'm just not that interested in the Titanic and I don't know really get what the attraction is.

DTEJD1997

  • Hero Member
  • *****
  • Posts: 1449
Re: PRXI - Premier Exhibitions
« Reply #17 on: October 10, 2013, 10:44:15 AM »
On a side note, I live in Chicago, where we have a couple world-class museums that I visit every once in a while, and I've thought to myself: if one of these museums bought the entire Titanic collection and displayed them, would I really care to go to the museum to see them? The answer is honestly, not really.

To all the bulls out there...think about this...the people who were willing to PAY good money to see the relics have largely done so.  Once somebody has seen them, I don't think they will go back 2-3 years later.  So it is largely a one use audience.

Thus, the "paydirt" has largely been mined out, and now the mine is worth a LOT less.  The time to be selling Titanic assets was a few years ago...not now.

Of course, there are people that are fanatics and will come multiple times, but they are probably a very small subset of audience.  There are also people that might have missed it the first time around too....but I just don't see these things being worth $180MM.  Not even close.

Kraven

  • Lifetime Member
  • Hero Member
  • *****
  • Posts: 1534
Re: PRXI - Premier Exhibitions
« Reply #18 on: October 10, 2013, 10:53:32 AM »
I don't really care one way or the other, but guess I have a bit of a different view on it.  For whatever reason the Titanic has captured a place in people's minds and they continue to be fascinated by it.  I could see the assets having tremendous value.  Management has clearly butchered the whole thing.  I have to think there are any number of people/banks that could have moved these assets.  In any case, I am not sure why people think there isn't potentially value here.  Why is a painting worth $60 mil or whatever?  This is a boatload (literally) of different things.

To me the logical resting place absent some free spending museum is a high traffic tourist area where something could be built around it.  Times Square and Las Vegas come to mind with perhaps Vegas being better.  Some hotel could make some hay with it I would assume.  Just issue a few junk bonds and see what happens!  It's not like that money needs to be paid back.
Buy cheap and something good might happen.

krazeenyc

  • Hero Member
  • *****
  • Posts: 715
Re: PRXI - Premier Exhibitions
« Reply #19 on: October 10, 2013, 11:16:34 AM »
I don't really care one way or the other, but guess I have a bit of a different view on it.  For whatever reason the Titanic has captured a place in people's minds and they continue to be fascinated by it.  I could see the assets having tremendous value.  Management has clearly butchered the whole thing.  I have to think there are any number of people/banks that could have moved these assets.  In any case, I am not sure why people think there isn't potentially value here.  Why is a painting worth $60 mil or whatever?  This is a boatload (literally) of different things.

To me the logical resting place absent some free spending museum is a high traffic tourist area where something could be built around it.  Times Square and Las Vegas come to mind with perhaps Vegas being better.  Some hotel could make some hay with it I would assume.  Just issue a few junk bonds and see what happens!  It's not like that money needs to be paid back.

I don't doubt the value of the titanic artifacts. Most expensive art that you see purchased is not being put permanently at a museum. And the pieces that are given to a museum would otherwise be in the hands of a private collector and hidden from the world -- essentially the benefactor is giving the world a gift when they donate it to a museum.  In the case of these artifacts, they are required to be available to the public -- so whether Bezos (random rich guy) buys it or not -- the public will get to see them.

By the way, I WANT to be convinced that there is a logical buyer. (So I can buy PRXI)
« Last Edit: October 10, 2013, 12:15:36 PM by krazeenyc »