RANT: Hedge fund is killing film finisher

[Socke]

My local film finisher CeWe Color, which is one of the biggest left in germany, is a public trading company and a NY Hedgefond is owns some 9% of the shares.

This is enough to call a stockholders meeting and get rid of the current board of directors and replace them with others.

Due to the transition from film to digital CeWe Color lost some 30% of its business last year and is in the process of closing one lab in Berlin and reduced the workforce from 3700 to 3000 and invests in digital processors.
They have capital reserves to keep them afloat while adapting to the new market requirements and the current board of directors want to invest into the companies future.

The hedge fund on the other hand is more interested in its own ROI and thus wants the capital reserves paid out to the shareholders and additionaly wants CeWe Color to take up a loan to finance a special disbursement in the range of 37 to 120 million which can't be paid from CeWes equity which is 113 million.

This will kill one of the last film finishers left in germany!

Luckily M2 Capital Management LLC is only a small shareholder and the founders heirs still hold some 27.5%.

CeWe Color is earning money, they have a sound business and they will adapt to the demands of a digital market. They develope my C41 films and slides and I have had lots of digital prints made there.

I just bought some shares 🙂

 

[RML]

Corporate greed sucks. Shareholder greed sucks even more. Capitalsim has its place but does incur greed in many, to the shame and sorrow of others.

 

[Ossifan]

What a shame that short term demands should take precedence over a solid business with a future. I wonder when we'll stop demanding growth from every business and be happy with solid but somewhat flat margins...

 

[thmk]

I wonder when we'll stop demanding growth from every business and be happy with solid but somewhat flat margins...

I assume never... 🙁

 

[dll927]

There are few noses around harder than business people, and especially financial ones. The bottom line is God, and tomorrow doesn't matter unless we can show an increase. To hell with the customers, in spite of what they like to claim.

Due to some unusually cold weather, my gas bill this month was $149.63. According to the bill (or the meter), I used 128 "therms", whatever that may mean (Anyone care to answer?) But they add a "billing charge" that says I used 142 "therms". Said "billing charge" is supposed to cover the company's expenses for billing and processing bills!!! In addition, there is a "daily charge" that I still haven't figured out. In other words, they add on more charges than the various governments do with all their taxes and fees, many of which cover things I didn't ask for, but we all have to pay to help the losers in society.

Why don't they just add up all that poppycock and put it into the cost of gas?? The very fact that they insist on listing all that crap is enough to make you throw up your hands.

 

[RML]

Why don't they just add up all that poppycock and put it into the cost of gas??

Because people like low prices, not high ones. You only get a shock after you consumed and actually have to pay the bill. 🙂

BTW, in Holland airline co's did the same thing with airline tickets. A new law is now forbidding such practice. Advertising prices now has to show the real cost instead of a deflated cost to which airport taxes, handling fees, reservation costs, etc still need to be applied.

When you buy retail the prices also are (by law) showing the price including VAT whether in a restaurant, a grocery store, the supermarket, the electronics or clothes shop, etc. And (again by law)... the price labels in the shop also show piece price or price per kg for all items. Makes comparing prices much easier than having to calculate whether a pack of 450 grams at price A is cheaper than a pack of 1375 grams at price B. 🙂

 

[dll927]

Which is at least some of the reason I'm glad I don't live in Europe. So far at least, it appears that the EU is creating as many problems as it pretends to resolve. To no great surprise, the biggest problem seems to be that no country is willing to give up any more of its "hegemony" than it can manage to hold on to. Can you imagine the U. S. forming that type of alliance with most of the fifth-rate outfits to the south????

A look at Evil-bay is rather instructive. Prices quoted by European sellers seem far higher than even stores here in this country. Buying from an individual may, in some ways, be inviting a little more risk, but that's why they have ratings on sellers, whether commercial or individual. If you're happy with a seller, who's complaining?

 

[RayPA]

I just bought some shares

LOL! 😀

Corporate greed sucks. Shareholder greed sucks even more. Capitalsim has its place but does incur greed in many, to the shame and sorrow of others.

unfortunately, it goes with the territory (going public), no? you offer your company to public ownership you have to succumb to these risks, pressures and mechanisms. The fund is operating in the same environment, has its "shareholders," expectations, etc. Would CeWe be the same company Socke has enjoyed these years had they not gone public?


🙂

 

[dll927]

Corporate greed sucks. Shareholder greed sucks even more. Capitalsim has its place but does incur greed in many, to the shame and sorrow of others.

Not that I'm helping any, but this is starting to get political.

I believe it was Winston Churchill who said that democracy is the worst form of government ever tried, except for every other form of government that has ever been tried. Capitalism probably falls into about the same category - as witness what happened to the FSU. Maybe it's just the mankind sin't good at developing 'systems' of government or finance that work to everyone's satisfaction - but it's that 'everyone' that is such a monkey wrench.

BTW, those who follow the "FSU cameras" forum know what that means - former Soviet Union. And note the "former". We may not be as bad off as we sometimes think.

 

[zuikologist]

What a shame that short term demands should take precedence over a solid business with a future. I wonder when we'll stop demanding growth from every business and be happy with solid but somewhat flat margins...

When growth and risk become unfashionable, probably in 2008 with the next stock market crash :0


This is the sort of business that is probably better off in private hands away from the hedge funds and short-term thinking.

 

[Trius]

M2 seems to have an HQ in the Cayman Islands. So likely they're not even paying full rate US tax on any gains. Using their address and doing a reverse lookup, I don't see them listed on whitepages.com, but I see Diamond Holdings LLC, Diamond Castle Holding LLC, and Gso Capital listed. A few other businesses are listed that may or may not be venture capital firms. The rest of the entries are residential. A whitepages search in NYC for a David Marcus, who is referenced elsewhere as a managing partner of M2, turns up eight results, none of which have a Park Ave. address.

K Capital Partners, Boston MA, also holds (or held, as of June 2006,) a significant number of shares which, combined with M2 shares amounted to 22% at that time.

Zoominfo has this entry for David Marcus:

David Marcus is the founder and part owner of M2 Capital Management, L.P. and Member of the Board of Directors of Modern Holdings, Inc. (Chairman of the Board of Directors), Novestra AB, Shared Value, Modern Times Group MTB AB, Scribona AB and Carl Lamm AB.