Private Equity Stock Review, Thursday 6/09/2011.
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2011 Reverse Merger Conference.
1. ALAS Holdings International Files 3rd Quarter Report.
2. Fortress (FIG) Portfolios, Mild Loss for May.
Stock Loans, Using Your Shares as Collateral.
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*2011 Reverse Merger Conference.*
The Reverse Merger Conference takes place June 13 & 14 in Los Angeles. This is the premier event for serious professionals in the business of alternative IPO transactions. The two-day event features technical training on the latest issues relating to reverse mergers, self-underwriting, and other alternative routes to the public market.
Join participants from Deloitte Financial Advisory Services, Gemini Partners, Paragon Capital, Chrysalis Capital Group, JJR Capital, TriPoint Capital Advisors, BDO Seidman, Trilogy Capital Partners, Rodman & Renshaw, Arcstone Equity Research, Bristol Capital Advisors and many more at the largest educational and networking event in the business. Registration is $1,495.
1. ALAS Holdings International Files 3rd Quarter Report.
The more we read about this, the more we're liking it. The more we talk to management, the more were liking it. Yes, we are early, as the stock currently trades by appointment -- but sometimes it's good to be early, like we were with Circle Group -- which dropped from $3.00 to $0.20 (where we showed up) and then back to $3.00 and then up to $9.00.
If we had said to you when it was trading at $0.25, that we thought it could someday go to two or three dollars, you would have thought we were nuts.
Right now, ALAS trades by appointment. Ten cents, twenty cents, then fifteen cents, then ten cents, then twenty cents....
This is "not" a trading vehicle.
If you pull up the old charts on Circle Group (now named Z-Trim) you can see that when we discovered it, it was trading by appointment too. Days went by when it didn't trade at all. Ten cents one day, twenty cents a few days later, then fifteen cents, then ten cents...
Point being, we've been there, done that. This is not new ground for us. We repeat, this this is not new ground for us. And if you think to yourself, "... well that was back in the dotcom days" you're wrong. This was back in 2002, when not much different for many small companies today, the world (Wall Street world) looked like it was going to end.
It wasn't that we were genius. What it was, was that we had a long term vision, which was if just "one" of the holdings in their portfolio takes off, that the valuation of the entire company as a whole could take off too. Not to brag, but we were so right.
So while we hate to beat that "analogy horse" to death, ALAS so much has the same feel -- we just can't resist.
We "like" the growth by acquisition model, when stock is being used as the currency. But we "love" the growth by acquisition model, during recessionary (or call it difficult) times when assets (not just "distressed" assets, but also "quality" assets that for whatever reason must be sold) can be purchased for fifty cents on the dollar.
So its only logical to think then, that nothing is better then the growth by acquisition model AND using stock as currency AND doing so during a recession. We want to be clear about that.
When there is no cash around (malady of the day), there is no one to compete with your bid -- so you can sit patiently with it. Which is the only caveat, you have to have patience. You can't run out and grab everything and anything you can get your arms around. You have to wait for it to come to you.
Ditto for shareholders.
This is the market that ALAS Holdings finds itself shopping in. This is how it recently acquired $20 million in assets for $8 million in stock.
Go here to page five, to see what we're talking about: http://www.otcmarkets.com/otciq/ajax/showFinancialReportById.pdf?id...
It says that they paid 800,000 shares of class "B" preferred stock, convertible into ten shares of common stock or the total number of shares equal to $8 million dollars.
This is real. They did it. They acquired $20 million in assets for $8 million. It's amazing. And they paid for it with stock. Hellooo, listen to us.
We had the opportunity to speak to the "acquiree," Peter Villiotis this past Friday.
Peter is a genius. So don't think he sold for "cheap" because he doesn't know better (see our reasoning below)
Peter is the CEO of ALAS's latest acquisition target, SAENZ Corp. Peter most recently was the former Director of Technical Operations for Carnival Cruise Line (NYSE: CCL), from 1988 to 2010. He is quite easily the most well connected person in the International Ship operating and building business we have ever come across*. He knows everyone in both the operating side of things and everybody in the building (ships) side of things (..as can be expected, with him overseeing a fleet of 100 mega-ships floating about. That's one hundred ships, with 100 crews, with 100 captains, with 100 engineers...)
Carnival Corporation, if you're not aware -- is the largest cruise vacation group in the world, with a portfolio of cruise brands in North America, Europe, Australia and Asia, comprised of Carnival Cruise Lines, Holland America Line, Princess Cruises, Seabourn, AIDA Cruises, Costa Cruises, Cunard, Ibero Cruises, P&O Cruises (UK) and P&O Cruises (Australia). Basically everyone. Altogether, they operate 100 ships totaling more than 193,000 lower berths, with eight new ships scheduled to be delivered between now and 2015. So make that 108 ships.
Let's look at the SAENZ acquisition, using a blend of reality and generality.
ALAS paid 800,000 shares of class "B" preferred stock, convertible into ten shares of common stock (or 8 million shares) or the total number of shares equal to $8 million dollars.
When we spoke to Peter, we asked for a photo of one of the Yachts which ALAS acquired.
See here, the MY Antibes: http://privateequitystockreview.ning.com/
We also asked for a copy of the survey of the MY Antibes, which listed a value of $8,397,207 Euros or $12,271,678 US dollars.
See here: http://goo.gl/g0cu3
The survey was conducted by Marinco Survey in Rotterdam.
With nearly 35 plus years of maritime experience and extensive knowledge of safety, regulatory, and engineering functions, Peter knows everything about the boating industry. So the first thing you might ask, is why in the world would he sell $20 million worth of boats, for $8 million ?
And this is where his "genius" comes in play.
Right now the boats are berthed in Europe. Right now, you cannot get "survey value" for boats, unless your willing to wait around for the right buyer or buyers. And things aren't looking so good in Europe, and Greece in particular for the next few years.
At the same time, he's not "desperate" for money.
So while he wouldn't take $8 million in cash, he would (and did) entertain an offer of $8 million in stock -- and here's why (simple math of course).
If the stock goes to $3, his shares would be worth $24 million. Let's not make this story too complicated. It is what it is.
If the stock goes to $5, his stake would be worth $40 million and everyone and their mother in the shipping industry would be talking about Peter and his genius. For real.
We are flying to Florida to see Peter Villotis this weekend to get the real skinny. But for now, nobody but you and us -- knows what has transpired here. That to us spells opportunity. And again, while it trades by appointment, it does trade. The opportunity for someone to sit on the bid (or somewhere in between) is there for the taking.
You can be "early" to this story, like we are. Or wait until things unfold. The choice is yours.
3rd Quarter Report: http://markets.financialcontent.com/demo/?GUID=18628894&Page=Me...
In May of 2011 the Company completed the acquisition of the SAENZ Corporation, a yacht charter company that owns 3 luxury yachts which will be relocated from the Mediterranean to the Bahamas. SAENZ has been in the yacht charter and yacht building industry for 25 years and will continue operate under the direction of Peter Villiotis the President of SAENZ, who has been in the charter and cruise industry for over 35 years. SAENZ will operate as a wholly owned subsidiary of the Company. In 2010, SAENZ reported an unaudited $4.5 million in revenues and a $1.0 million Net Profit.
In its recent filing, ALAS announced that it acquired SAENZ on May 7th, 2011 for 800,000 shares of class B Preferred stock, each convertible after one year to 10 shares of Common stock, or to the number of total shares equal to $8 million dollars, whichever is higher.
Ed Salmon said, "We're excited to complete the SAENZ acquisition which equates to eight times last year's profits and 40% of its reported asset value, as determined by a third party survey of the three ships. The ships are the MY Antibes surveyed at $10 million, the MY Strovili surveyed at $5 million and the MY Aurora with a survey value of $5 million. We invite you to review our filings on the OTC Markets website to answer any questions you may have concerning the details of the SAENZ acquisition, as well as our past and current operating strategy."
2. Fortress (FIG) Portfolios, Mild Loss for May.
While we are up 104% in Fortress, we continue to view it as the best vehicle to take advantage of a company, which is able to acquire assets on the cheap. It will perform in line with the market plus X.
Meaning if the market is up 20%, it should go up 20% plus X. If however the market falls 20%, it will most likely drop 20% plus X.
However, during the volatility, it will continually be able to acquire assets cheap. This is a good thing.
NEW YORK (Dow Jones)--Fortress Investment Group LLC (FIG) reported mild losses in all its liquid hedge funds for May, according to a regulatory filing released Monday.
Its five liquid hedge funds, including the Asia-focused macro funds launched in March 1, lost between 1.15% and 2.46% last month, it said. Despite May losses, the Asian funds were still up 2% for this year and its commodities fund also gained 1.24% for the year through May. Its Fortress Macro Fund, however, lost 1.80% this year through May.
Meanwhile, its less-liquid credit hedge funds posted small gains in April, rising between 0.82% and 1.44%. Their year-to-date gains stood at between 4.07% and 7.33% through April, it said. Performance data for credit funds were delayed as it takes longer to measure illiquid assets.
Fortress is one of two public U.S. hedge-fund managers that report fund performance and assets under management in monthly Securities and Exchange Commission filings; the practice isn't required. The other manager is Och-Ziff Capital Management LLC (OZM) whose largest hedge fund, the OZ Master Fund, was flat in May.
*Okay, he's the only one we know, but trust us -- ask any big player in Maritime industry and they know who he is.
Disclaimer: VDSC. Safe Harbor Act Disclaimer: Statements regarding financial matters in this press release other than historical facts are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934, and as that term is defined in the Private Securities Litigation Reform Act of 1995. The Company intends that such statements about the Company's future expectations, including future revenues and earnings, technology efficacy and all other forward-looking statements be subject to the Safe Harbors created thereby. The Company is a development stage firm that continues to be dependent upon outside capital to sustain its existence and risks and uncertainties associated with the Company's business, including but not limited to the risks and uncertainties associated with venture capital investing. Since these statements (future operational results and sales) involve risks and uncertainties and are subject to change at any time, the Company's actual results may differ materially from expected results. Client, we have been retained by the company to report on their progress for five hundred shares and ten thousand dollars.
FIG: Cautionary Note Regarding Forward-Looking Statements Certain statements in this Current Report may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are generally identified by the use of words such as "outlook," "believe," "expect," "potential," "continue," "may," "will," "should," "could," "would," "seek," "approximately," "predict," "intend," "plan," "estimate," "anticipate," "opportunity," "pipeline," "comfortable," "assume," "remain," "maintain," "sustain," "achieve" or the negative version of those words or other comparable words. Forward-looking statements are not historical facts, but instead represent only the Company's beliefs as of the date of this report regarding future events, many of which, by their nature, are inherently uncertain and outside of the Company's control. Numerous factors, including, but not limited to, the net asset value of assets in certain Fortress funds, could cause actual events to differ from these forward-looking statements, and any such differences could cause our actual results to differ materially from the results expressed or implied by these forward-looking statements. In addition, new risks and uncertainties emerge from time to time, and it is not possible for the Company to predict or assess the impact of every factor that may cause its actual results to differ from those expressed or implied in any forward-looking statements. Not a client.
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