master98 you uncover another reason why it is in the robinson's family best interest to keep RAK investors interested in this dog company RENT!!!!!!!!!!!!!! for the property they own and lease to this dog company they run.
Seems to me the only one's benefiting from this company are the one's making the poor shareholder wealth decesions.
That's I said before Robson family won't let another party to T/O this company, they treat Rakon as their MONEY TREE.
I take a rather dim view of Rakons asset backing. For one, I suspect their rather highly specialised crystal oscillator fabrication machines aren't worth that much on the open market - things are really only worth what others would pay for them and the market for such specialised machinery must be rather small. I suspect if Rakon were to go belly up, the purchase of their machinery would be fire sale prices as well. In China, they don't own the land they sit on as its impossible to own land in China. They lease it from the government and only own the improvements. In the case of them wanting to sell the Chinese equipment, the same would apply as I have said. Which means the only value is the concrete walls and roof. In China, the building would be knocked down, the steel extracted and the rest potentially recycled or dumped. Essentially the Chinese site I consider to be of near enough to zero value (I live in China and know how they work). They could potentially sell their lease and factory to someone else, but in China its pretty much just as cheap to build a new place to fit your needs exactly rather than modify someone elses place. I have been to the area around Chengdu where the Foxconn and Rakon is located - there is a lot of spare land there that is not yet leased, so I would expect that anyone new coming to the area would build their own, not use someone elses.
Now the revelation they don't own the land in NZ.
In all seriousness, I wonder what their actual asset backing is? It sure as hell ain't 190 odd million...
And why on earth are they holding $45 million of inventory?? That's 1/4 of a years work... no JIT management going on there...
So not only are the Robinsons making massive salaries at Rakon at a time when the company is losing money due to their bad management, they are also getting 580k in rent from the company. Could someone work out the combined total the Robinsons receive? I remember reading their salaries were something like 800k or something ridiculous (I could be wrong, don't quote me!).
My god. What a mess.
My "sell" signal for this company has suddenly turned into a "run screaming before its too late, take whatever you can get!". Suddenly Snapiti's comments aren't so extreme :-)
If it goes down, I pick $50 million returned to investors maximum via receivers. $40 million depending on receivers fees.
Cheers winner, right, so according to that, no matter the share price, the Robinson family directly rakes in nearly $2.2 million a year while Rakon is operating.
Just noticed in their HY financials they state their share capital is $173,846. That must burn the eyes for every initial investor when they see the current capitalisation of the company.
Inventory level is $53 million... I take it that is most likely completed products waiting to be shipped? If they are holding $53 million of raw goods, that seems a bit ridiculous. They are holding almost as much inventory as the capitalisation of the company. Actually this figure in total is quite ridiculous, if I was at a shareholder meeting I would ask them to go in-depth on this. I know their goods are small, but $53 million must be a half a warehouse full at the price they are selling 'em.
One interesting quote from their HY 2013 financials:
"743,289 unpaid ordinary shares were on issue and held in trust on behalf of participants in the Rakon Share Plan (31 March 2012: 743,289, 30 September 2011: 743,289);"
So no Rakon employees are interested in buying Rakon shares for at least 6 months from September 11 last year to March 12. Interesting.
They also report a rather large amount of goodwill. Hopefully companies will donate money to Rakon if they go into receivership to make their $25 million of goodwill a reality. Uhhh... don't hold your breath.
Should we rename this thread to "Rakon bagging"?
Last edited by blobbles; 07-01-2013 at 05:37 PM.
Reason: Not AR, half year financials
Originally Posted by snapiti
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