Imation (IMN) (GLA) valuation is a fast moving target. So, making a value assessment is painful. Furthermore, recent opaque restructuring events and earnings call commentary on discontinued operation's disputed liabilities is unclear. Note the stock moved 25% from Wednesday's (02/15/17) price of $0.62. This price change increases short term risk.
Background story:
Imation (IMN) formerly a data storage technology company has
been the target of Clinton Group’s activism since 2015. Clinton forced Board / management
changes. Three directors replaced at the 2015 annual meeting. CEO resignation Q3
2015.Executive bonuses frozen, board compensation reduced and every business
line reviewed for profitability and capital requirements. Also, a complete analysis of
strategic options.
The next step during 2015, sale of non-core assets (IronKey, HQ
real estate, Memorex trademarks). Decrease cash burn, manage cash/equity
investments and strengthen Nexsan. January 2017 Imation agrees with Clinton Group to fast
track change to a publicly traded asset management firm. An established
investment advisor will manage third party capital following the closing transaction with Clinton Group.
On 02/10/17 Imation (IMN) announced it will change its name
to GlassBridge Enterprises. This event concludes the strategic transition of
the Company's business activities to become a publicly-traded alternative asset
manager with Clinton Group.
Further, “A 1:10 reverse stock split of IMN. The name change
and the reverse stock split will both be effective Tuesday, February 21,
2017. New ticker symbol from "IMN" to "GLA", to take
effect following the effectiveness of the name change and the reverse stock
split.” http://bit.ly/2kCQ5nd
The
growth plan is to hire experienced investment teams, analyze joint venture
opportunities and/or acquisitions.
Current Valuation per Seeking Alpha as of 02/17/17
Market Cap: 29.01M ,Enterprise Value: -26.13MGross Profit (ttm): 39.21 , EBITDA: -14.51M
Total Cash (mrq) 49.60M , Total Cash Per Share (mrq) 1.34
Total Debt (mrq) : 0
Quick Ratio (mrq) : 1.20 , Book Value Per Share (mrq): -0.08
52-Week Change : -2.61%
52 Week High: 1.81 , 52 Week Low: 0.47
Shares Outstanding: 37.24M , Float: 21.87M
% Held by Insiders: 41.58% , % Held by Institutions: 70.83%
Shares Short 2.42M , Short % of Float 11.08%
Review of 3rd quarter balance sheet, commentary and subsequent Q3 8K restructuring events.
Below starting column 2(labeled "Current") is the Q3 balance sheet per SEC10Q. Management discussed other liabilities during the Q3 earnings call. Short term other liabilities are 56.20M , long term other liabilities 34.60M. Specific comments made during the Q3 earnings call. "current asset of $15.3 million primarily consist of $10.8 million of restricted cash which was associated with the certain disputed trade payables related with two venders and $1.8 million of receivables. Other current liabilities of $37.9 million included $28.7 million accounts payable. We are disputing approximately $26.8 million of trade payables.The remaining liabilities were primarily related to customer rebate and credit which might or might not require cash settlement." adjustments made under column 3 (labeled "Q3 Adj per earnings call")
The actual cash liability will have a significant impact on the current 29M market value. Impact of discontinued operation's liability is still less than certain.
The following are 8K events released after Q3 (reported on 11/08/16). Shown under column 4 on the last two rows before "Total equity per share after Nexsan adjustment ...".
8K: 01/27/17: "Stock sale of Nexsan Corporation ("Nexsan") to NXSN Acquisition Corp an affiliate of Spear Point Capital. IMN (GLA) received a senior secured convertible promissory note issued by NXSN in an initial aggregate principal amount of $25 million, subject to certain adjustments (the "Note"), and (ii) 50% of the issued and outstanding shares of common stock of NXSN (the "NXSN Shares"). The remaining 50% of the issued and outstanding shares of NXSN common stock is owned by Spear Point Private Equity LP ("SPPE")." http://bit.ly/2mdvhz2
8k 02/03/17: " entered into a Capacity and Services Agreement with Clinton and GlassBridge Asset Management, LLC ("GlassBridge"), our investment adviser subsidiary. As consideration for the capacity and services Clinton has agreed to to issue 12,500,000 shares of Common Stock to Madison Avenue Capital Holdings, Inc. ("Madison"), an affiliate of Clinton, on the Initial Closing Date".
http://bit.ly/2lxLVfP
8k 02/10/17: "approved a 1:10 reverse stock split . We also announced that we will change the name of the Company to "GlassBridge Enterprises, Inc." http://bit.ly/2mdfdxi
Balance sheet Q3 + adjustments for earnings call comments + 8k events.
Value Institution ownership (note John Rogers' Ariel at 21.61% of TSO)
