Hello Everyone.
I just wanted to throw this on the table for you all. LiveDeal Inc. is currently trading at a 41% discount of NCAV and 32% discount of NNWC.
It seems to me like this company act as the middle man between small companies and potential customers. They help small companies find local customers by doing stuff online over the internet and through telemarketing.
Pros:
- It's trading at a pretty discount. One of the things that could happen is this company stopping business and liquidating in which the shareholder will get a refund of their investment or more back. But there is a possible catch. Please read below.
Cons:
- This company is in alot of Legal Battles:
- Joe Cunningham v. LiveDeal: Former Board of director/Chaireman is seeking damages, backpay, litigation cost, and his former seat. He is suing due to discrimination employment practice. (This one I'm not too concern about since it hasn't been brought up since 2008)
- State of Washington v. LiveDeal: It seems like some trade secrets were given to the State Attorney General's office when it entered into a Consent Decree due to some regulatory dispute. Now it seems like some of LiveDeal's opposing legal counsel got this information… Case is pending.
- Global Education Services, Inc. v. LiveDeal: GES has alleged in its complaint that the Company's use of activator checks violated the Washington Consumer Protection Act. The parties have filed dispositive motions and anticipate a ruling on such motions in early 2010.
- Complaint filed by Illinois Attorney General against LiveDeal: State of Illinois has filed a complaint that LiveDeal has employed deceptive and unfair acts and practices in violation of the Illinois Consumer Fraud and Deceptive Business Act. LiveDeal has been doing some telemarketing that may have been bad…
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LiveDeal, Inc. v. OnCall Superior Management (“OSM”) and SMeVentures, Inc. (“SME”): In this lawsuit, LiveDeal sued their contracted Outsourced Call center in the phillipines for breach in contract. LiveDeal seems to have been on the losing side and agreed to pay them 300K to close all litigation in 2006 and 2007. They came up with a new service agreement in which LiveDeal will pay OSM 125K for services up until July of 2010
- CEO and CFO resigned at the Beginning of the year.
- Only one Risk Factor listed: 33% of workforce has been layed off.
Catalyst: Managment planning to do something like sell the company, or assets, or aquire other businesses.
Here is my thought on this company.
CEO seem to have left the company in worser shape than when he entered back in May of 2009 when it was 1.25/share. The company is in bad shape and doesn't seem like it will survive but the company has cash and management seem to search for a way to save the company which includes selling the company.
I would say this may be a great deal if it did not have any lawsuits. Its legal battles may eat away the cash and leave the potential investor with nothing. I really did not go into much detail which this company other than looking at its recent 10-Q and 10 year overall history but I do not see a moat that will sustain this business since it's business model seems easily reproducible.
I would like people's feedback on this potential NNWC/NCAV stock Ideal. Please tell me what you think about how this company's lawsuit and terrible management may affect it's potential to be a NNWC. Thank you all.
-SHM
No Holdings.
An excerpt from January shows what they are planning to do:
LiveDeal, Inc. announced that Richard F. Sommer has resigned as the Company’s Chief Executive Officer, effective immediately. As a result of his departure, Mr. Sommer has also resigned as a member of the Company’s Board of Directors. LiveDeal also announced that its Board of Directors is actively exploring a variety of strategic alternatives in its ongoing efforts to maximize value for the Company’s stockholders. Among other potential transactions, these strategic alternatives could involve the sale of LiveDeal or certain of its assets, or the acquisition of other entities or businesses. There can be no assurance, however, that the Board’s exploration of strategic alternatives will result in a transaction. The Board of Directors is in the process of considering engaging a financial advisor in connection with its exploration of strategic alternatives.
http://www.reuters.com/finance…..0105204300
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