Wednesday, February 27, 2008

Woulda, Shoulda, Coulda

My securities firm's bullpen, or sales floor, is a lot like the betting room of a horse racing track. For one thing, it's full of guys with hot tips. For another, some jerk is always complaining about just missing out on a fortune. The stock doubled the day after I sold it, I think is pretty much the same thing as, I lost by a nose, right?

At my firm, and I suspect in those smoke-filled back rooms at the track, this kind of whining about lost winnings is dealt with harshly. In my experience, the offender is typically shouted down by a chorus of, "Woulda, shoulda, coulda, pal. Woulda, shoulda, coulda."

As explanation to those of you who do not instinctually understand this phrase, I offer the following facts: One, yesterday (Pigs in a Blanket) I said I was hot to buy DISK on the Nasdaq because it rose 36 cents to $1.80. Fact two: Today DISK rose another 23 cents, to $2.03, on double the 10-day average volume. Third and final fact: I did not buy it for our portfolio.

If I WOULDA trusted my instincts, I SHOULDA bought DISK at the opening yesterday, and then I COULDA made money for us.

That's the hallmark of any woulda, shoulda, coulda deal. The sentence always starts with IF.

Forget IF, my friends. We must accept the past and move on. I called Mr. C to ask if we should jump in so late in the game.

"What's the scoop?' I said.

"Look at the chart. The story's right there. DISK had a merger deal for about $4 a share, but the deal fell apart at the end of January. The stock crashed. Now some people are thinking, hey, this company was looking to sell out before. They signed a deal. Sure it fell through, but maybe they've got another deal in the wings."

Just for laughs, I wondered what Image Entertainment does for a living. Here's what the company says:

Image Entertainment, Inc. is a vertically integrated independent home entertainment content supplier engaged in the acquisition, production and worldwide distribution of content for release on a range of formats and platforms. The Company is primarily engaged in the domestic acquisition and wholesale distribution of content for release on digital versatile disc (DVD).

I don't know about you, but I still don't know what they heck they do. At least not from that. I asked Mr. C, and he said, basically, DISK owns the rights to some old TV series. Reruns.

Exciting, huh?

If we buy it at $2 and it gets bought anytime this year for $3, it's 50% on our money. That's pretty exciting.

But also a gamble. DISK recently reported another multi-million-dollar loss. Business is not exactly robust.

It woulda been nice to buy it yesterday at $1.80. I guess I shoulda. But I don't think I coulda now.

1 comment:

Anonymous said...

austin
here are some of the stats for MBRK so the boys can get on the phone and sound intelligent. maybe that isn't important. nice move on the DISK. i also didn't buy it. shoulda,coulda,woulda.
corkface
A little reminder on possibilitiesfor mbrk $14:
Back of the envelope musing calculation:

59 MILLION PRESCRIPTIONS (rx) AMOX/YEAR
5% MARKET SHARE PULSYS
3MILLION rx's
$20/rx 50%profits $30M/year
30M/ 49M ouststanding shares=.61/Shr
P:E 15 yield $9.15
50% buyers premium (and asuming little value assigned to keflex and pipeline)= $14/share value wiyh approval and aquisition value of meadowbrook.