I think we are all in for a bumpy ride the balance of the year.
11 replies (most recent on top)
koez - What about a business that may not be around in 24 months? One that's sales are dropping fast, customers are fleeing, market share shrinking and stock price crashing. Other than that things look great for this gem of a company.
IRS usually will not challenge asset sales or restructurings completed 24 months after the initial split. not a definite rule but tax advisors would say wait 2 years so as not to jeopardize the tax free nature of the initial REZI spin.
1rnk - I don't know the specifics on the timeline, but I have heard from people that are involved in M&A that it is 18 months. I think that if it happens it will help the stock in the short term, but will put a lot of pressure on the business going forward. What we all need to be focused on is how we help improve the product launches and performance now. If we can't do that, based on the comments on the earnings call about cost reductions, there will be fewer of us to do it by the end of the year.
Curious as well, figured ADI would be sold, but who would pick it up? Also, timing.
1yyb - EXCELLENT post...thank you. They have been talking about selling ADI for a long time. With the massive push to DIY and huge cost of brick and mortar it may be time before its not worth anything but a huge cost. I also agree it leaves a whole lot of nothing with little to no bright spots like ADI to help save the rest of this sinking ship. When would that timeline to avoid tax implications be?
Word through the internal grapevine is that we are already deep in talks to sell ADI and won't announce anything until closer to the timeline where they can sell it without tax implications. I think ADI is the only business that we could get value from at this point and then Resideo becomes a pure product/solutions play that should deliver higher margins. If there is any truth to that, I think it puts a ton of pressure on the company to deliver premium products and solutions and I'm not sure our current leadership team is capable of that.
The longer anyone waits the less anything would be worth. Then again, what do we have anyone would want. The alarm.coms, ring alarm and simply safe are k–ling security, I wont go into thermostats. security cameras? ours are so bad you can't keep them up and the quality is like its from 1991. Maybe they would want to buy our manufacturing plants...that cant manufacture worth a damn and have to be outsourced. Then there's those great M&As of obscure c-ap other companies are already doing better. maybe our innovative technology and software....lol. I actually just made myself chuckle.
So do we have any ideas who may be interested in picking up the pieces once it gets broken up for sale? I suspect this will be the outcome within 12 months.
They will try and put as good a spin on it as possible but to your point ...next quarter will be REALLY bad. Like record breaking for all the wrong reasons just based on July alone.
Wait until next quarter....they have no more favors (sales) to call in. Hearing the number for July should have been printer in a diaper. Fail of epic proportion.
Yes, looks like a small loss for the quarter.
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