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The plot thickens (Meade takeover)

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#1951 David Pavlich

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Posted 16 August 2013 - 09:57 AM

I don't understand this comment or why it is directed at masvingo.

The comment itself could be directed at the entire institution of corporate governance: "Can a Chief executive of a company be considered successful if they enrich themselves even as the company fails?"


A slightly different track would be this:

If a company is losing a billion dollars a year, fires the CEO and brings on a new person to right the ship and this new guy still loses money, but it's only 500 million, this new CEO has increased cash flow by 500 million. He probably gets a bonus for saving a half billion dollars. The company's still in the red, but the shade of red got a little lighter. And if that trend continues, we have a revitalized company. That's a good thing!

David
 

#1952 csrlice12

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Posted 16 August 2013 - 10:11 AM

Well, the current Management isn't going to make out big-time on "Golden Parachutes"...more like "Brass Bandannas"--See attachment.

Attached Files


 

#1953 Lee D

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Posted 16 August 2013 - 10:17 AM

I don't understand this comment or why it is directed at masvingo.

The comment itself could be directed at the entire institution of corporate governance: "Can a Chief executive of a company be considered successful if they enrich themselves even as the company fails?"

I hope we can agree at least that none of the C-level executives over the last 15 years have been stupid or incompetent, unless you can show that they left the business as less than multimillionaires.


Apparently if you use "Quick Reply" at the bottom of the screen, the forum software marks it as a reply to the last post automatically.

I didn't say that a CEO was considered successful under those results. I said the CEO wasn't stupid or incompetent.

It depends on the situation whether I would regard the CEO as successful or not. Some things can not (or should not) be saved, or would be very difficult to save. If the CEO manages the wind-down well (while enriching themselves), that I would consider a success.
 

#1954 EddWen

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Posted 16 August 2013 - 10:39 AM

Thanks for that.

Yes, just about the final document. A quick skim reveals some key inflection points. I'll review it more later today.

Thx,


The definitive proxy statement has been filed with the SEC and is available for review there. Shareholder meeting set for September 12th. I know its long, but for anyone who hasn't read it, its well worth while to read through the proxy document - there's a lot of good and relevant information there.

http://www.sec.gov/A.../d543435ddef...


 

#1955 ur7x

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Posted 16 August 2013 - 11:03 AM

I've noticed something akin to this time and time... People who like a brand, or like a product tend to blindly support that brand's CEO even if it is clear to all that he/she is in completely over their head. As strange as it sounds most share holders are even more blind. You had people who loved GM blindly support Wagoner, HP supporters loved Fiorina, HomeDepot Fans loved Nardelli, etc... In spite of industry wide evidence that each one of these CEO's were marginal at best, and most of them outright sucked.

We need to look at it this way. It is OK to be a Dallas Cowboys fan and recognize that Tony Romo is a lousy QB. It is equally OK to support a company a recognize that its management is failing. If anything, people who like, support and own Meade products should be outraged at what Meade Management did to this company over the last few years. There is no "whoopsie-daisey"/"my bad" in business management. Most companies do not go broke on their own.

Meade got to where it is today with more than a little help from within.
 

#1956 Starhawk

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Posted 16 August 2013 - 11:05 AM

I'm still not sure what you're trying to say. I don't think anyone has been saying the Meade CEO must be stupid. Some mistakes have been made, even when there was warning they were mistakes since the same action had worked out that way before. I don't think of that as the gold standard for competence. Are you looking for folks to say all of these actions and their outcomes happened through no fault of Meade leadership?

-Rich

I don't understand this comment or why it is directed at masvingo.

The comment itself could be directed at the entire institution of corporate governance: "Can a Chief executive of a company be considered successful if they enrich themselves even as the company fails?"

I hope we can agree at least that none of the C-level executives over the last 15 years have been stupid or incompetent, unless you can show that they left the business as less than multimillionaires.


Apparently if you use "Quick Reply" at the bottom of the screen, the forum software marks it as a reply to the last post automatically.

I didn't say that a CEO was considered successful under those results. I said the CEO wasn't stupid or incompetent.

It depends on the situation whether I would regard the CEO as successful or not. Some things can not (or should not) be saved, or would be very difficult to save. If the CEO manages the wind-down well (while enriching themselves), that I would consider a success.


 

#1957 ur7x

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Posted 16 August 2013 - 11:17 AM

Well, the current Management isn't going to make out big-time on "Golden Parachutes"...more like "Brass Bandannas"--See attachment.


Upon read of the SEC filing, I would say that Meade Management would be treated, what I would call "fairly" A 12 month severance agreement is not uncalled for and is at the low end of what many ex-CEO's tend to get these days. Those terms are not "generous" and are not "stingy" either.
 

#1958 Spacetravelerx

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Posted 16 August 2013 - 11:32 AM

I've noticed something akin to this time and time... People who like a brand, or like a product tend to blindly support that brand's CEO even if it is clear to all that he/she is in completely over their head. As strange as it sounds most share holders are even more blind. You had people who loved GM blindly support Wagoner, HP supporters loved Fiorina, HomeDepot Fans loved Nardelli, etc... In spite of industry wide evidence that each one of these CEO's were marginal at best, and most of them outright sucked.

We need to look at it this way. It is OK to be a Dallas Cowboys fan and recognize that Tony Romo is a lousy QB. It is equally OK to support a company a recognize that its management is failing. If anything, people who like, support and own Meade products should be outraged at what Meade Management did to this company over the last few years. There is no "whoopsie-daisey"/"my bad" in business management. Most companies do not go broke on their own.

Meade got to where it is today with more than a little help from within.



True many people fall in this camp of blindly support the CEO, though there is a degree of faith.

Me? I have been very down on the C-level management at Meade. Like I said, I would go "Bar Rescue" on the place if I owned Meade.

The SEC Schedule 14A is a fascinating read (I am not done with it). It is clear things have been very busy behind the scenes.

I only wish in 2011/2012 I was fully aware of the goings ons with Meade. I had way (and still do) too much on my plate. If I was aware, I would thrown my hat in the ring as a bidder - very seriously.

Also, I am unimpressed with MITC after reading the document.

Quick impression is unless a bidder comes up with significant buy out funds and can up the purchase price (in addition to having funds to clean up things), it looks like this deal will go to Sunny.

Back to meetings, but I am looking forward to reading the rest of this document.
 

#1959 rdandrea

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Posted 16 August 2013 - 11:53 AM

Thanks for the link, Ken. Interesting read. I wonder who "Bidder B" and "Bidder C" were?
 

#1960 Starhawk

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Posted 16 August 2013 - 12:20 PM

I've really been interested in that as well. I can only assume they weren't Burgess and Carson. Will these be secrets forever? Do shareholders have the right to ask who the bidders were?

-Rich
 

#1961 dawziecat

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Posted 16 August 2013 - 01:04 PM

We're talking about products so poorly designed they never could have done what was being claimed.


Well, my take is there are a zillion "companies" that are just plain frauds. They turn out absolute junk, just as you describe. The very definition of "absolute junk" could well be "products so poorly designed they never could have done what was being claimed."

If this is what Meade was doing, they are no better than the entities (hard to dignify 'em with being "companies) peddling the garbage on TV for $19.95 (plus S&H in small print).

Earlier in this thread there was a post that "600 plus power" is put on boxes for tiny refractors "because it works."

If that sums up the ethics of business, I am too honest to be a businessman.

I can't be especially charitable to Meade management as some here seem to be. The company has failed, and rather spectacularly so at that. If it's not the management's fault, just whose is it?
 

#1962 rmollise

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Posted 16 August 2013 - 02:40 PM

Intellectual Property, eg patents, knowhow, trade secrets, designs, etc


Well. that's a relief. I wasn't understanding what Internet Providers had to do with this Meade thing...

Dave


I was thinking "IP addresses?" :lol:
 

#1963 EddWen

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Posted 16 August 2013 - 02:59 PM

This document is boilerplate for the most part. But there is more revealing current information here.

Most people here are probably interested in the deal between JOC and Meade. I, amongst others, felt it would be a good fit between the entities involved. Obviously the deal fell through. JOC was not happy with its findings after due diligence.

Such is indicated by reading the Background of the Merger.

Here are some points extracted from there.

The first serious discussions started March 1, 2013 when Meade provided the first due diligence material to Jinghua/MI Europe (JOC).

On April 22 2013 JOC reduced its offer from $5M to $4M, based on their due diligence findings.

May 17, Meade and JOC sign a Merger Agreement and file such with the SEC. Due diligence continues.

June 11 Ningbo make a non-binding indication of interest at $5.5M. Per the Merger Agreement Meade inform JOC of the offer.

In my opinion, I think it was clear to both JOC and Meade that their deal would not be consummated. This is indicated by the fact Meade provided due diligence material to Ningbo the next day. Had JOC made serious objections, their agreement with Meade had not expired yet, this would not likely occur.

The real inflection point comes on July 11 when JOC formally offers to end their Merger Agreement and accept the $250,000 termination fee. This is filed on July 16.

Something I (we?) did not know about before; the MITC offer to increase their proposal to $4.50/share on July 25. That played into Meade’s hand and Ningbo pushed their offer up.

August 5 Meade signs an amended Merger Agreement with Ningbo.

So, now we are where we were when Meade signed a Merger Agreement with JOC and a shareholder meeting was scheduled, but it never happened. I do, however, feel this deal will go through in some form. Ningbo seems to want Meade, and Meade has no other options.

I could play the devil here and suggest another offer from MITC may be made. They’ve driven the stock price up with little in effort or expenses. Another $0.50 per share for what they own is icing on the cake. Huge risk involved however, they might end up owning something they know little about.


Thanks for that.

Yes, just about the final document. A quick skim reveals some key inflection points. I'll review it more later today.

Thx,


The definitive proxy statement has been filed with the SEC and is available for review there. Shareholder meeting set for September 12th. I know its long, but for anyone who hasn't read it, its well worth while to read through the proxy document - there's a lot of good and relevant information there.

http://www.sec.gov/A.../d543435ddef...


 

#1964 EddWen

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Posted 16 August 2013 - 03:05 PM

No, it's Alias Smith & Jones.

We will never know unless there is a shareholder lawsuit and you participate in it.

What ever happened to the two suits you opened this Pandora's Box with?




I've really been interested in that as well. I can only assume they weren't Burgess and Carson. Will these be secrets forever? Do shareholders have the right to ask who the bidders were?

-Rich


 

#1965 kkokkolis

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Posted 16 August 2013 - 03:27 PM

What ever happened to the two suits you opened this Pandora's Box with?


We call it the "Bags of Aeolus" in my aboriginal country, for whom would like to know. Ulysses (Odyssey) asked Aeolos, the Keeper of the Winds, a west wind in order to move his ship to Ithaka. But his sailors opened the container bag and all winds got out simultaneously. A great tornado resulted.
Pandora in another myth (Theogonia) closed the box (Pithos in fact) just before hope (Elpis) could vanish, so I like your version.
Sorry for off topic, discussing my country's history and mythology is a reflex.
 

#1966 ken svp120

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Posted 16 August 2013 - 04:24 PM

What ever happened to the two suits you opened this Pandora's Box with?


We call it the "Bags of Aeolus" in my aboriginal country, for whom would like to know. Ulysses (Odyssey) asked Aeolos, the Keeper of the Winds, a west wind in order to move his ship to Ithaka. But his sailors opened the container bag and all winds got out simultaneously. A great tornado resulted.
Pandora in another myth (Theogonia) closed the box (Pithos in fact) just before hope (Elpis) could vanish, so I like your version.
Sorry for off topic, discussing my country's history and mythology is a reflex.


Love the off-topic! Always enjoy a bit of mythology, nice side-bar and thanks for sharing!
 

#1967 Starhawk

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Posted 16 August 2013 - 04:42 PM

Edd,

I am guessing the lawyers looked this over and told the shareholders they were lucky to be getting what JOC was offering, much less more.

The real surprise for me was learning when I've been acting as the Devil's advocate, I've been advocating for Edd Weninger!

And it isn't every day one gets commentary on Greek mythology from an original source.

-Rich

No, it's Alias Smith & Jones.

We will never know unless there is a shareholder lawsuit and you participate in it.

What ever happened to the two suits you opened this Pandora's Box with?




I've really been interested in that as well. I can only assume they weren't Burgess and Carson. Will these be secrets forever? Do shareholders have the right to ask who the bidders were?

-Rich


 

#1968 EddWen

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Posted 16 August 2013 - 05:26 PM

Yes, thanks for that.

It seems my analogy was correct. There has certainly been a lot of wind in this thread.

Yes Rich, I am not an advocate...


What ever happened to the two suits you opened this Pandora's Box with?


We call it the "Bags of Aeolus" in my aboriginal country, for whom would like to know. Ulysses (Odyssey) asked Aeolos, the Keeper of the Winds, a west wind in order to move his ship to Ithaka. But his sailors opened the container bag and all winds got out simultaneously. A great tornado resulted.
Pandora in another myth (Theogonia) closed the box (Pithos in fact) just before hope (Elpis) could vanish, so I like your version.
Sorry for off topic, discussing my country's history and mythology is a reflex.


Love the off-topic! Always enjoy a bit of mythology, nice side-bar and thanks for sharing!


 

#1969 Starhawk

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Posted 16 August 2013 - 10:43 PM

So, what is decided on now doesn't seem to say what happens afterwards. Is the assumption for shareholders they should only care about the price and not the fate of what they are selling?

-Rich
 

#1970 ur7x

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Posted 16 August 2013 - 10:56 PM

Those two items kind of go hand in glove. If the shareholders think that Meade has a future and will make whack of money in the future then they shouldn't sell.

If they think Meade is done, then they should get out while the getting is good.
 

#1971 Lee D

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Posted 16 August 2013 - 11:05 PM

So, what is decided on now doesn't seem to say what happens afterwards. Is the assumption for shareholders they should only care about the price and not the fate of what they are selling?

-Rich

It depends on the shareholder, doesn't it? Two execs own a lot of shares. If this goes ahead, they sell them, but they still may want a job.

Steven G. Murdock 50,000
John A. Elwood 33,333

We don't know what the other large shareholders ongoing interests may be.

Zhang Xiaoyan 125,541 9.62%
Hummingbird Funds and Paul D. Sonkin 99,659 7.63%
Yifeng Zhang 81,041 6.20%
GRT Capital Partners, L.L.C. 68,656 5.26%
 

#1972 EddWen

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Posted 16 August 2013 - 11:21 PM

No, that does not work. If you own shares and do not sell them to Ningbo, the shares are cancelled, per the merger agreement.


Those two items kind of go hand in glove. If the shareholders think that Meade has a future and will make whack of money in the future then they shouldn't sell.

If they think Meade is done, then they should get out while the getting is good.


 

#1973 EddWen

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Posted 16 August 2013 - 11:29 PM

If the deal is done, Meade will become a wholly owned subsidiary of Ningbo through the entity they set up in the U.S. to make the purchase.

What happens going forward will be solely done by the decisions of Ningbo. They need not say anything about what plans they have, and will probably not say anything.

Shareholders have no say now about price of shares, or what will happen in the future.


So, what is decided on now doesn't seem to say what happens afterwards. Is the assumption for shareholders they should only care about the price and not the fate of what they are selling?

-Rich


 

#1974 Starhawk

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Posted 16 August 2013 - 11:29 PM

So, you get to vote, but no matter how you vote, if the sale carries the day, you must sell or your shares are cancelled? Do I understand that correctly?

-Rich
 

#1975 EddWen

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Posted 16 August 2013 - 11:56 PM

Both Murdock and Elwood both own considerably more shares than those numbers. Those numbers are just the vesting of restricted shares contracted to Murdock and Elwood as part of their recent employment agreements.

Murdock, for example, has voting rights to ~198,000 shares. Not sure how many Elwood has. Neither party will have any shares after the deal. The severance agreements void the employee contracts, and neither will have a job with Ningbo in future.

Now, when the restricted shares to Murdock and Elwood are vested during the closing, they will immediately owe taxes on the value of the shares, $4.50/share. The shares also have an Option price that was decided when the employee agreements were effected. They would have been valued at the price the shares were trading on that day.

The shares they already own will be more complicated to determine their worth. The info is out there, but one would have to sift through many SEC filings to do an accurate calculation. I do recall seeing an Option price of $4.40/share for one of Murdock's deals. It would be safe to say that neither one will net a huge retirement fund. Fed taxes max at 38% and CA state tax is 12%. These taxes will be due on any gains they make on the stock sale.

That's too bad in a way. The guys spent most of their working years doing their best and it didn't work. These so called "golden parachutes" will not be gold for them.

Other shareholders will have no interest, or say, in the future. Their shares will be bought out completely.



So, what is decided on now doesn't seem to say what happens afterwards. Is the assumption for shareholders they should only care about the price and not the fate of what they are selling?

-Rich

It depends on the shareholder, doesn't it? Two execs own a lot of shares. If this goes ahead, they sell them, but they still may want a job.

Steven G. Murdock 50,000
John A. Elwood 33,333

We don't know what the other large shareholders ongoing interests may be.

Zhang Xiaoyan 125,541 9.62%
Hummingbird Funds and Paul D. Sonkin 99,659 7.63%
Yifeng Zhang 81,041 6.20%
GRT Capital Partners, L.L.C. 68,656 5.26%


 


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