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Jim:
I'm outraged... not
just the standard
level of anger...
but really furious
about the fact that
a guy I really
respect,
SanDisk Corp. (SNDK)'s
CEO, Eli Harari,
failed to take
Samsung's generous,
more than generous,
$26 a share takeover
bid for his company.
Samsung made the
offer back in early
September, but SNDK
rejected the bid.
You know, it was
only a 93% premium
from where SNDK was
trading, before the
news came out,
saying the offer,
get this, you'll
love this...
significantly
undervalued SNDK,
and calling it,
quote, "an
opportunistic
attempt to take
advantage of SNDK's
current stock
price." Well, sure,
the stock had been
cut to ribbons,
along with almost
everything else. He
claimed that the bid
was a ploy to gain
leverage in separate
negotiations between
the two companies.
Now, look, I'm a
paranoid guy myself.
I pride myself on
paranoia. Although
there are whole
national ad
campaigns confirming
that it's not
paranoia... I still
think SNDK's excuses
sound nuts to me. I
mean, Samsung, of
course, finally
dropped its offer
today, and SNDK fell
to $10 bucks...
$10.09... 61% lower
than the $26 that
Samsung was willing
to pay.
On Monday, I put
Straus Zelnick,
Oleg Khaykin,
and
John N. Lauer
up on the
Wall of Shame
for rejecting bids
that would have made
their shareholders
money, in the name
of staying
independent. Today,
Eli Harari, of SNDK,
gets to join them on
the Wall... We've
had him on the
show... I feel bad
about this... Well,
he did the exact
same thing as these
guys...
Eli... here you go.
No more friend. You
disappointed us.
We're both sad and
outraged at your
uberous. In this
market, everybody,
when you get a bid,
you say yes. You
don't haggle. You
don't claim your
company is worth
more, because it's
only worth what
someone will pay for
it. Listen to what
Rohm & Haas (ROH)
did, right, when
they pants'd the
guys at DOW with an
unbelievable bid.
Any CEO who rejects
a deal like the one
Samsung made for
SNDK, is looking out
for himself, not his
shareholders. And he
will find himself on
this Wall.
I reiterate that
that doesn't mean
you should hound the
employees. The
executives... they
deserve a
hounding... the
employees... not
their fault.
Alright, let's do
some email...
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Continued below...
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Wednesday,
October 22, 2008
(Cont'd from
above)...
Viewers write to
Jim, asking
about stocks or
simply about the
market in
general...
|
Jim's
rating on
this stock |
STOCK
SYMBOL |
Closing
price that
day |
Full Company Name & Jim's
Comments: |
|
 |
GPC |
34.54 |
Mad Mail question:
Genuine Parts Co. (GPC)
Q: I am like a lot
of people that have had to cut back on
expenses in order to survive the
economic market we are in. As a
consequence, I have put off buying a new
car and will have to make do with what I
have. This means repairing and
maintaining a car that is already 5+
years old. As I'm sure many others are
in the same situation, what do you think
about companies that specialize in
automotive replacement parts? I am
looking at GPC as a play on this. What
do you think of this company?
Jim: We looked at
it... we looked at it and, to tell you
the truth, we were concerned. It has too
much actual auto, and not enough auto
aftermarket... That's why we like
Monro Muffler Brake Inc.
(MNRO)...
We like Mr. Gross, who runs that. He had
a blowaway number. M-N-R-O... is your
thesis, my friend, not GPC.
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MNRO |
20.96 |
Mad Mail question:
Monro Muffler Brake Inc.
(MNRO)
See GPC comments above for:
MNRO
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na |
na |
Mad Mail question:
General question...
Q: Why aren't you
telling Cramerica to actively support
Pickens' Plan by writing to their
representatives to get off their
political backsides and understand that
Boone is the only common sense person
dealing with this crisis. The benefits
are obvious: more jobs, clean renewable
energy using wind and solar corridors,
improved balance of payments and less
dependence of unfriendly sources of
foreign oil, and the potential to
reinvigorate our auto industry by
significant adoption of natural gas as
the auto fuel of the future. We're
looking for you to be our crusader!! Do
something.
Jim: Actually, I'm
probably the single-greatest crusader on
TV about this... and I totally believe
that, as oil goes down, this is going to
be more and more problematic. Of course,
the loans that the government gave to
the automakers did not specify natural
gas, which was a huge blow to the cause,
and I told people to go to that
PickensPlan.com site. I can't really do
more... I wanted to have them directly
write... I wanted to march on
Washington. Boone said I'm getting ahead
of myself.
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COP |
49.06 |
Mad Mail question:
ConocoPhillips (COP)
Q: I agree with you
on dividends being the way to protect
yourself - protect yourself from the
downside and the upside should take care
of itself. Continuing with the theme,
what do you think of COP? COP trades
below book value with a 3.76% yield. I
know you've been against the buybacks
because lately, it has not been a good
investment, but COP also bought back a
staggering $2.5 billion in shares last
quarter. I feel like this is a great way
to stay in the game with a limited
downside.
Jim: No... there are
many oil companies that still now north
of 4%, that are every bit... well, maybe
COP's a little bit better, but I need
that protection... You've got to go with
the ones that are north of 4%. COP's not
down enough yet, even though it seems
pretty darn frightening how much it's
come down.
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