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The PC business has been bizarre lately. Of course, there was the case of Dell's exploding laptops.
Something else that has been unusual: Gateway's stock has been surging.
Then again, as I wrote about in BloggingStocks.com this week, a hedge fund put the company "in play" by purchasing 10% of the stock. The fund also hired Firebrand Partners, which uses strategies to encourage shareholder value.
Firebrand's first step was writing a letter to Gateway's management. Yes, so far, it has been sheer poetry for Gateway shareholders. In fact, Firebrand Partners gets 10% of the profits on the adventure – and is well in-the-money already.
Now, another player has joined the fray: Lap Shun Hui, who was the former backer of eMachines. This company was sold to Gateway several years ago. In other words, Hui has a pretty good understanding of Gateway's value.
He is prepared to write a check for $450 for the retail operations of Gateway. He's even hinted that he might be interested in buying the whole company.
Yes, investors got a nice pop this week on Gateway. No doubt, Hui's offer is probably not the final one (anyone who has $450 million to spend certainly knows how to negotiate).
However, these buyout scenarios can get crazy and is really a game for those who are speculators – not investors.
Tom Taulli is the author of a variety of books, such as the Complete M&A Handbook and operates InvestorOffering.com.
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Reader Comments (Page 1 of 1)
8-23-2006 @ 12:29PM
Bob Gifford said...
It's a wonder GateWay has hung on this long.
They not only have any direction, they have no
Customer support, no Customer releations or any-thing
else a Computor Company should have. It's as if no
one is at home.
The Company is like a horse with Two broken legs,
shoot the damn thing and put it out of it's misery.
I bought a computor from them six years ago. It came with out a hard drive, you thank they would believe me. I had to go out and buy one.
I told them then, they would someday be out of business. I thank the Customer is still right regardless of what George Bush think's. Bob Gifford.
8-23-2006 @ 1:39PM
Bob Gifford said...
Tried to cash in my 17,954 reward balance points
yesterday with my Chase Charge Card. I was told by
the lady I couldn't do that and the only way I could
use them was to pay for my AOL internet service.
I told her I was leaving AOL and she said she was sorry but the rewards points could only be used for
AOL. I ask her where the rewards points would go and
she said they would just expire.
It seems that Chase Bank formaly Bank One is where the expiring will go to the tune of about $170.00.
I told them I had had this card for around eight years and had charged ten's of thousands of dollars
to their benefit. This didn't seem to make any diffrence with them, the lady said once again the points could only go to AOL. I ask her if she was a real person? "The points can on be applieded to AOL"
Good by Chase, good by AOL. Hello Citi-Bank.