Very differing view on KSWS at our morning meeting today. Here are the pros and cons by the broader team…
We just got out of our morning meeting, and had a particularly spirited debate about K Swiss, and Casey Flavin’s posting from earlier. Casey and I took the special dividend as good for shareholders today, but limits the opportunity set to build create value with existing assets and acquire new ones on the cheap (there are many) with its pristine balance sheet. Also, business is not good, the company is entering new product lines with varying working capital requirements, and the time just seems too early for me to comfortably stomach.
On the flip side, our Macro team – Keith McCullough and Daryl Jones took the polar opposite side that this was one of the most capitalist-focused moves this market has seen of late. Dole out a quarter of your cash, and still leave the company with a solid balance sheet and a lot of dry powder to keep optionality high. If the CEO can pay himself and his team along the way, then all the better.
Feel free to email me your 2 cents. I’d love to hear your view. Right or wrong, I never come out of a debate less smart and informed than when I went in.
Casey Flavin
Director
On the flip side, our Macro team – Keith McCullough and Daryl Jones took the polar opposite side that this was one of the most capitalist-focused moves this market has seen of late. Dole out a quarter of your cash, and still leave the company with a solid balance sheet and a lot of dry powder to keep optionality high. If the CEO can pay himself and his team along the way, then all the better.
Feel free to email me your 2 cents. I’d love to hear your view. Right or wrong, I never come out of a debate less smart and informed than when I went in.
Casey Flavin
Director