Author Topic: SYTE - Enterprise Diversified  (Read 215687 times)

writser

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Re: SYTE - Sitestar
« Reply #180 on: September 19, 2016, 08:12:44 AM »
I'm happy for Dave, he seems a nice guy and a good investor. On the other hand I'm glad I'm not a minority investor. It would have been courteous if SYTE returned cash to shareholders so they could decide for themselves whether they want to invest in A) a HVAC business or B) a microcap fund encapsulated in a microcap stock. Now it's forced down your throat, as are the private placements. This is a reverse listing of a private investment vehicle. Also it would've been nice if they gave some information about the price range (and the buyers) of the private placement in the press release.
« Last Edit: September 19, 2016, 08:16:53 AM by writser »
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eclecticvalue

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Re: SYTE - Sitestar
« Reply #181 on: September 19, 2016, 08:21:32 AM »
Wow........... I was excited for the rollup of the HVAC business and now they are branching out to another business already.

Jurgis

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Re: SYTE - Sitestar
« Reply #182 on: September 19, 2016, 08:24:04 AM »
On the other hand I'm glad I'm not a minority investor. It would have been courteous if SYTE returned cash to shareholders so they could decide for themselves whether they want to invest in A) a HVAC business or B) a microcap fund encapsulated in a microcap stock. Now it's forced down your throat, as are the private placements.

OTOH, if SYTE returned cash, minorities would have received ~book == ~$4.X
Now they can sell their shares at >1.5 book or so assuming market is liquid at $7 and laugh their way to the bank.

The patsies are minorities buying at $7-8 IMO. But sure they have some motivation to pay >1.5 book for a diluting hedge fund...  ::)

Edit: and BTW, you could invest with Dave directly without paying 1.5x recently. Maybe no longer ...
« Last Edit: September 19, 2016, 08:28:08 AM by Jurgis »
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writser

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Re: SYTE - Sitestar
« Reply #183 on: September 19, 2016, 08:34:17 AM »
Sure, if I owned shares I'd have sold them by now and would probably be content with my returns. But the fact that the market presents me a juicy bid doesn't necessarily mean I agree with the course of action taken by the company.
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ratiman

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Re: SYTE - Sitestar
« Reply #184 on: September 19, 2016, 08:47:32 AM »
So beyond all of the obvious problems, no ownership of the GP? Just passive investment as LPs, paying the manager a fee?  Apparently by "asset management business" SYTE means that it will be paying fees to asset managers.

oddballstocks

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Re: SYTE - Sitestar
« Reply #185 on: September 19, 2016, 08:57:18 AM »
This is quite the evolution!

Regarding Dave's fund, this is fascinating.  I know he's been thinking about this for a few years because we've been talking about the idea over beers for a few years.  This makes SYTE very attractive to me at this point.  Dave's fund will be a hedge fund only available to accredited investors.  I know some of the stuff he looks at, I won't share details on here, but it's some of the most attractive/esoteric/illiquid stuff I've ever seen.  Mostly strange securities in strange markets that are closed to individuals.  Things I'd like to have some exposure to, but couldn't do it on my own.

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InelegantInvestor

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Re: SYTE - Sitestar
« Reply #186 on: September 19, 2016, 09:15:27 AM »
Dave was one of Kiel's nominees in the proxy fight. He didn't make it onto the Board in the settlement. Total number of shares he owned then: 0

Hielko

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Re: SYTE - Sitestar
« Reply #187 on: September 19, 2016, 09:50:18 AM »
So beyond all of the obvious problems, no ownership of the GP? Just passive investment as LPs, paying the manager a fee?  Apparently by "asset management business" SYTE means that it will be paying fees to asset managers.
Yeah, providing 10 million in seed fund without getting a stake in the GP seems like a crappy deal to me. But perhaps at least the fee structure is good...

Poor Charlie

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Re: SYTE - Sitestar
« Reply #188 on: September 19, 2016, 10:37:32 AM »
So beyond all of the obvious problems, no ownership of the GP? Just passive investment as LPs, paying the manager a fee?  Apparently by "asset management business" SYTE means that it will be paying fees to asset managers.
Yeah, providing 10 million in seed fund without getting a stake in the GP seems like a crappy deal to me. But perhaps at least the fee structure is good...

Most people in finance won’t pick up a pencil without carry, so I’m sure that both the HVAC and Alluvial GPs will be getting a nice percentage of any profits.  Also, I’d bet Kiel doesn’t want to be left out and will find a way to arrange some kind of override compensation structure for himself at some point.  A lot of big stomachs to fill for such a little company. 

Truth be told, I don’t really mind the compensation though as long as it’s approved by the owners of the company, including the minority owners.  What really turned me off to this was the private placement they did.  Massively diluting existing shareholders at ‘book value’ after you (a) wrote off/down assets that were ‘cash flowing’ (phrase I believe Kiel himself used in a letter to Erhartic to point out their value) and (b) fail to mention certain off-balance sheet assets (first.com) that could have substantial value in relation to the .048 BV doesn’t strike me as aboveboard.  Doing so, however, under the guise of making quorum?  That’s just downright slippery. 

InelegantInvestor

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Re: SYTE - Sitestar
« Reply #189 on: September 19, 2016, 10:50:04 AM »
So beyond all of the obvious problems, no ownership of the GP? Just passive investment as LPs, paying the manager a fee?  Apparently by "asset management business" SYTE means that it will be paying fees to asset managers.
Yeah, providing 10 million in seed fund without getting a stake in the GP seems like a crappy deal to me. But perhaps at least the fee structure is good...

Most people in finance won’t pick up a pencil without carry, so I’m sure that both the HVAC and Alluvial GPs will be getting a nice percentage of any profits.  Also, I’d bet Kiel doesn’t want to be left out and will find a way to arrange some kind of override compensation structure for himself at some point.  A lot of big stomachs to fill for such a little company. 

Truth be told, I don’t really mind the compensation though as long as it’s approved by the owners of the company, including the minority owners.  What really turned me off to this was the private placement they did.  Massively diluting existing shareholders at ‘book value’ after you (a) wrote off/down assets that were ‘cash flowing’ (phrase I believe Kiel himself used in a letter to Erhartic to point out their value) and (b) fail to mention certain off-balance sheet assets (first.com) that could have substantial value in relation to the .048 BV doesn’t strike me as aboveboard.  Doing so, however, under the guise of making quorum?  That’s just downright slippery. 

Keep in mind- there will be another private placement to fund the Alluvial commitment, which will have to be twice the size of the last one.