Author Topic: RCII - Rent-A-Center  (Read 12436 times)

Jurgis

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Re: RCII - Rent-A-Center
« Reply #10 on: December 14, 2017, 07:42:29 AM »
Bought back some shares. Quite some volume today and a decent price swing. I see no news - brokerage report or something?

They appointed some guy as chairman of board:

Quote
Rent-A-Center Names J.V. Lentell as Board Chairman
BY MT Newswires
5:06 PM ET 12/12/2017

05:06 PM EST, 12/12/2017 (MT Newswires) -- Rent-A-Center (RCII) said in a regulatory filing late Tuesday that its board of directors appointed J.V. Lentell as chairman.

Lentell joined the board in 1995 and was lead director from April 2009 until January 2014.
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writser

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Re: RCII - Rent-A-Center
« Reply #11 on: December 15, 2017, 12:35:12 PM »
They appointed some guy as chairman of board:
I saw, but I don't read too much into that.

What's your current theory for where those summer bids went?
Well, admittedly it's a weak theory but one bid is still on the table and as far as the others are concerned: the company, with the new activist board members, declined an exclusivity agreement with Vintage Capital and is doing a strategic review, probably trying to reach out to potential buyers. Could take a while to reach a conclusion. In the meantime I don't expect the company to churn out press releases. Buyers were interested last summer, doesn't seem crazy to assume they still are. We'll see what happens.

Given the prices offered last summer I think $10 is a decent entry point for a small gamble and $12 a decent exit.
When you are dead, you do not know you are dead. It's only painful and difficult for others. The same applies when you are stupid.

writser

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Re: RCII - Rent-A-Center
« Reply #12 on: December 21, 2017, 03:10:39 PM »
I sold after todays open. RCII was up significantly the past few days and I didn't exactly think it was good news they are declassifying the board. Sure, from a corporate governance standpoint it is great but I just want the company to strike a deal and if they start to issue press releases that, from June 2019 on, directors will stand for elections annually, then that doesn't exactly suggest to me that the company will be sold in a few weeks.

Bought back a tiny position after the stock drifted down 5% intraday but from now on I'll probably be slightly more conservative. Managed to flip my position a few times. Better lucky than smart I guess ..
When you are dead, you do not know you are dead. It's only painful and difficult for others. The same applies when you are stupid.

Foreign Tuffett

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Re: RCII - Rent-A-Center
« Reply #13 on: January 02, 2018, 09:41:09 AM »
Stock is down on news that the CEO is resigning effective immediately. Not a shock since he was recently voted off the board and was criticized by the activists who are now in the driver's seat.

http://investor.rentacenter.com/phoenix.zhtml?c=90764&p=irol-newsArticle&ID=2324373

MrB

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Re: RCII - Rent-A-Center
« Reply #14 on: January 04, 2018, 12:52:32 AM »
I sold after todays open. RCII was up significantly the past few days and I didn't exactly think it was good news they are declassifying the board. Sure, from a corporate governance standpoint it is great but I just want the company to strike a deal and if they start to issue press releases that, from June 2019 on, directors will stand for elections annually, then that doesn't exactly suggest to me that the company will be sold in a few weeks.

Bought back a tiny position after the stock drifted down 5% intraday but from now on I'll probably be slightly more conservative. Managed to flip my position a few times. Better lucky than smart I guess ..

The board is the obstacle to a deal being struck and the fact this is a staggered board lies at the heart of the problem. Declassifying it is huge, although a bit late, because it is almost certain that Engaged will achieve a majority on the board by June/next AGM anyway. 

MrB

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Re: RCII - Rent-A-Center
« Reply #15 on: January 04, 2018, 01:04:57 AM »
Stock is down on news that the CEO is resigning effective immediately. Not a shock since he was recently voted off the board and was criticized by the activists who are now in the driver's seat.

http://investor.rentacenter.com/phoenix.zhtml?c=90764&p=irol-newsArticle&ID=2324373
Mark's influence over the board is most likely the single most important reason why Engaged has been unable to affect their proposed organisational/strategic changes, which include the pursuit of a sale. Fadel is Engaged's man and being a previous COO means Engaged's proposals should be implemented effectively and quickly. Whether Engaged's proposed changes will add value is another matter, but Engaged has everything they've been pushing for now. The CEO change is a big deal.

If you believe the story then today's price at about 12% more than Engaged's average cost (they started buying in Oct 2016) seems like a good entry point.

kab60

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Re: RCII - Rent-A-Center
« Reply #16 on: January 04, 2018, 02:00:13 AM »
Sooo... Apart from buyout speculation (which does seem like the eventual outcome), what do people actually think about the business, the valuation and it's progress during the last year or so? It seems like a lot of the problems were self-inflicted with misaligned incentives and much too high staff turnover. Things that should be fixable.

MrB

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Re: RCII - Rent-A-Center
« Reply #17 on: January 04, 2018, 02:24:21 AM »
Sooo... Apart from buyout speculation (which does seem like the eventual outcome), what do people actually think about the business, the valuation and it's progress during the last year or so? It seems like a lot of the problems were self-inflicted with misaligned incentives and much too high staff turnover. Things that should be fixable.
Correct, according to Engaged. This presentation lays it out
http://www.engagedcapital.com/press/RCII-Presentation.pdf
Supplement
http://www.engagedcapital.com/press/Supplemental-Presentation-to-Rent-A-Center-Stockholders.pdf

The back and forth between Engaged and RCII as well as between RCII/Engaged and the SEC is worth a read and can be found in the RCII filings.

writser

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Re: RCII - Rent-A-Center
« Reply #18 on: January 04, 2018, 03:52:21 AM »
MrB - thanks for your insights.
When you are dead, you do not know you are dead. It's only painful and difficult for others. The same applies when you are stupid.

Bluffy

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Re: RCII - Rent-A-Center
« Reply #19 on: January 04, 2018, 03:55:09 AM »
I am still thinking about the impact the new tax bill will have. In this case I am not sure how I could quantify the future impact of the immediate expensing provision has to for example a strategic acquirer.
Am I correct in my assumption that in RCIIs case they don't have immediate GAAP profitability so they cannot reduce their taxes further into negative territory with the immediate expensing of for example their inventory?
Any thoughts are appreciated!