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MG Holdings/SIP: Partners with Your Banking Partners MG Holdings/SIP is a sole proprietor, corporate finance advisory dedicated to the design and execution of Cashless Buybackstm and Cash xPRTtm offerings. A Cashless Buybacktm is a riskless, antidilutive transaction. It is a supplement (or superior alternative) to a 10b-18 cash repurchase program. A Cash xPRTtm offering provides far better pricing / lower fees than a standard offering of common shares. Cashless Buybackstm and Cash xPRTtm offerings are transactions appropriate for undervalued corporations. MG Holdings/SIP, as the exclusive licensee of patent rights to Cashless Buybackstm and Cash xPRTstm, will implement transactions for your firm and/or serve as advisor to the bankers of your choice. We have presented to firms ranging in size (equity market capitalization) from under $50 million to over $50 billion. MG Holdings/SIP was founded by M. A. ("Mike") Gumport. Intellectual property patent protection filings were made in 2005. Previously, Mike served as Institutional Investor magazine ranked semiconductor equity analyst for 10 years, most recently at Lehman Brothers, before becoming CFO and/or director of several semiconductor startups, most notably Sage (acquired by Genesis Microchip).
As an equities analyst, Mike observed that high growth, cyclical companies, however good their future prospects, from time to time become substantially undervalued. During periods of severe undervaluation, using cash to repurchase shares might actually prove counterproductive: A weaker balance sheet might push a company's stock price even lower (increased financial risk and consequent higher discount rate might more than offset any increase in EPS from the reduced share count). Or, in difficult times, a company simply might not have access to sufficient cash to undertake a buyback in the desired size. In response, Mike devised the Cashless Buybacktm, an intelligent transaction for underpriced corporations. For example, a Cashless Buybacktm could allow a company whose shares are trading at $10 apiece to sell stock at $30 per share as soon as its stock price hit a $16 target anytime within 3 years. Alternatively, if the company has no need of cash, the company could, upon hitting the $16 target, receive back 20% of its outstanding shares at a cost of $0 (zero). A Cashless Buybacktm improves a company's financing flexibility, and, particularly for smaller firms (market capitalizations under $1 billion, or any firm whose average daily trading volume is below 2% of outstanding shares) will substantially benefit liquidity. Tax and accounting treatments are straightforward and neutral. Unlike a cash buyback, a Cashless Buybacktm is riskless. If the target is missed, there is no penalty to the firm or its participating shareholder - no debt, no interest, no cash outflow, no dilution. If the company fails to hit its target (fails to sell stock at $30 per share upon hitting its $16 target), MG Holdings/SIP receives little or nothing. Our success is contingent on our clients' success. Because a Cashless Buybacktm is riskless, it can be implemented in unusual size. For instance, a 75% buyback is feasible. Importantly, Cashless Buybackstm are transparent, fair and shareholder friendly. Cashless Buybackstm are responsive to the governance and corporate liability issues raised by 10b5-1 / 10b-18 / management stock option program conflicts that have attracted the attention of regulators and legislators. | Partners MG Holdings/SIP has presented to the largest investment banks. We are prepared to architect and execute transactions on our own or in concert with your preferred bankers. | Clients MG Holdings/SIP has presented to firms ranging in size (market capitalization) from under $50 million to over $50 billion. We are prepared to deliver indicative term sheets within 48 hours without obligation. |
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