This recap plan was so predictable. Check out the 2007 post linked here. I Warned in 2007 that JJL would drive the stock to $7-$8 a share and JJL would take back private in 2010/2011. A little early only diffence is they took the stock back up to $8 share than they make a offer to dilute it down to $2 a share taking majority control again prior to taking private. In effect stealing the Company.

This was not in minority shareholder interest at all. Thought they may have turned the corner with removal of Kevin but looks like the long range 5 year plan is still in place.

Profit by taking the Company public at the peak of the 2006 market. Wait for cycle to turn ugly; buy back share 2009 at pennies on the dollar; wait 2011 for the housing cycle to stabilze; and repeat cycle in 2015-2020 with a new public offering.

They actually had a chance to ride out the storm with stock on the rise with fewer competitors. Instead JJL decided to follow the 5 year plan at the expense of the minority shareholder with a $2 dilution and taking a majority position in the company. What is wrong with the plan to be a lone survior, let the stock rise, sell shares, than pay down debt. Owe thats right, the stock would slip away from JJL and they could buy on the cheap from minority shareholder and thus profit on the next upturn.

Better to artifically create a recapitalization plan that would dilute minority shareholder out of existence.

Bad deal.
The Teacher