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Investment Q&A

Not investment advice or solicitation to buy/sell securities. Do your own due diligence and/or consult an advisor.

Q: Hi 5i team
What would be your opinion of the Callidus review by Lawrence Delevingne and John Tilak issued today. I have held this stock for a while and I am down on it enough to feel uncomfortable but I can hold on for years if that's what it takes. I feel the picture painted is one sided in this article but the stock does not have any support, so this does back up the reporting. I was going to wait to see what earnings come out like. Maybe I should cut my losses and move on now and admit to myself that this stock was a misstep. Also what do you think of Mr. Glassman's management style/history is it worth the risk for reward. What type of buyer would be buying this stock at todays prices in your opinion. Thanks for your help. J
Read Answer Asked by Jeremy on March 26, 2018
Q: Hi 5i, I would appreciate some more info in relation to your recent comments on Callidus (CBL), which I still hold. I don’t want to take issue with them; I just want to get clearer on whether and how they should impact my own view. I took the company’s report last summer (along with management’s comments) to indicate that improvements were needed to both loan portfolio growth and the balance sheet in order to motivate sufficient interest for the company to be taken private. I interpreted the company’s report last fall as confirming that view. At the time of the last report it seemed to me unlikely that CBL would be able to show much improvement on either aspect before their next report (March 31?) or possibly the following one. Accordingly, I determined to hang on to the shares for the next couple of reporting periods (subject to new information), to see whether there were emerging signs of the required improvements. Since then, this is what I am wondering about, I have seen no news reflecting on the company’s business performance. I can understand people becoming fatigued with the stock and its treatment by the market and I can understand the passage of time eroding peoples’ confidence in the prospect for a profitable go-private transaction. But that aside, is there any fundamental business information you are aware of, which has come available since their last report and reflects negatively on CBL’s business and its related prospects? Thanks.
Read Answer Asked by Lance on March 16, 2018
Q: Good day gentlemen,
Does this company still have a viable business model? So much has been made about this potential take over but I believe the market has discounted this possibility for quite some time. What I’m more concerned about is what’s wrong with the fundamental business? They have been around for some time. Can they no longer produce returns? I know you mentioned that perhaps you would consider selling due to lack of takeover news. Would you consider holding for yield and a solid business, with potential upside?
Thx
Read Answer Asked by Giuseppe on February 05, 2018
Q: Hi 5i,
I’m continuing to hold some Callidus (CBL) shares reasonably patiently. But I’d be interested in any further thoughts on the insider activity on CBL over the past few months. The INK report shows predominantly two buyers: Braslyn Ltd and Callidus itself. (You noted previously that Lewis controls Braslyn) The shares repurchased by Callidus are consistently cancelled at the end of each month. The Braslyn purchases are small lots (a few as big as 10-15,000 but smaller most recently), certainly relative to the size of Braslyn’s total holding (over 7.1M shares). Small lots obviously won’t move the price significantly on a given day. But is this buying too incremental to be significant or might something be going on? Obviously if there is to be a go-private takeover at a premium, continuing to accumulate near $10 might work out well for Braslyn. But is it likely that Braslyn is angling to orchestrate a takeover itself? The trading share float seems relatively small on this already (around $100M and less than 20% of the market cap). I don’t know if I have seen a situation quite like this one before. It seems like if the float erodes enough the current insiders could just have it go private by agreement. Thanks.
Read Answer Asked by Lance on December 15, 2017
Q: There is consistent insider buying in CBL but it seems to be pretty much limited, at least very recently, to two parties: Joseph Lewis and Braslyn Ltd. Do you know if Braslyn is controlled by Lewis (the purchases seem to mirror each other)?
Is there anything to infer from this other than a positive outlook from at least one insider?
Read Answer Asked by Peter on December 12, 2017
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