Value Vs Price

We all know the old saying "Price is what you pay, Value is what you receive".

Cellestis is the absolute demonstration of this.

We have been offered the justification for this lowball offer that the price is 24% above the one month Volume Weighted Average Price. 

That is simply a failure of logic.

As investors, we want a recognition of the Value of our investment, not a comparison price to a market price. We all know that the market rarely prices value correctly. A mere few weeks ago Cellestis was trading at $2.40. Immediately before the takeover the shares were trading at $3. Had the value of Cellestis shares really changed by 25% in those few short weeks? Of course not. 

So many things that have nothing whatsoever to do with Company value can impact the price of a share. We are all familiar with Companies that are adept at driving their share price to spectacular levels with aggresive announcements. (I certainly do not criticise our Directors for not having gone down this path). 

It is, however, worth considering how the share price might have been affected had the Company paid a larger dividend in the half year from cash profits earned in that half year for which (it is now clear) they had no purpose. 

Price does not equate to value.

I might value my ride-on mower at $5,000. If I was offered a price of $1000 for it last week then the fact that somebody offers me $1240 this week is not going to make me sell on the basis that the offer is 24% more than last weeks "price". This is all particlularly true if I had no plans to sell the mower in the first place. 

In our situation it is particularly galling when the Scheme calls for an Independant Expert to decide what is best for us. I have managed my investment in Cellestis for ten years now - I don't need somebody else to tell me that I am to be forced to sell my shares at a particular price.

But, guess what? The Independent Expert, The Cellestis Directors, other shareholders, Qiagen ... nobody ... can tell us to sell our shares at $3.55 if, together, we vote this Scheme down. 

If we demand that the value that we see in Cellestis be retrieved for us then it will be so.

(Don't forget to skip across to Cellestis Shareholders Action Group Blog and don't forget to REGISTER )

Where am I?

I know that you would have expected much comment here from me regarding the proposed takeover of Cellestis. No doubt there will be.


However, in the meantime, may I suggest that you take the short hop across to the Cellestis Shareholders Action Group Website to keep abreast of all matters regarding this takeover.


If, like me, you want a better outcome than this then I also suggest that you REGISTER HERE


See you over there.

Action.

Firstly let me make a statement.

"I reject the offer of $3.55 for my shares in Cellestis"

Now.

If we are to achieve a better outcome for ourselves then we must work together towards that. There are probably only a handful of times in most persons lives where they need to stand up and be counted. This is one of those times for us.

Over the coming days we will need to better define our final objectives and put together an action plan. Regardless of what these may be, our first step is to build a communication structure. To that end, I have put in place a simple mechanism to collect details of shareholders who wish to support this fight. At this stage I am not asking anybody to commit to any action or outcome - simply a desire to act to achieve a better outcome than that currently being proposed.


It is vitally important that we have as many people as possible register on the form linked below. It doesn't matter how many shares you have - every vote is vitally important. Whatever action we, as a group, decide to take it will only succeed ifeach and every one of you registers. Furthermore, there are many shareholders that will not see this post. I am relying on you to spread this word. Email it to every person that you know that is a CST shareholder. Speak to everybody that you know is a CST Shareholder. Repost this on every forum, blog, website that you have access to. 

At this stage I am only asking for very basic information from you. I do, however, know that we all value our privacy. I promise to you that the personal information that you provide will not be made available publicly and will only be used for the purpose of this action. At the end of this action all information provided will be destroyed. I think that everybody here knows that I am a man of my word.

As a show of good faith I am willing to do something that I have never done before.

My name is Vic Bula and I can be contacted at forrestthinks@gmail.com.

Make no mistake. This is a battle that we can win.


Please Register Here.

Good Morning.

Good Morning Everybody,

Just a pre alert.

I have rearranged my personal life (yes, I do have one) in anticipation of dedicating myself to the battle for the next few months.

Today I hope to take the first steps to putting an organization into place. I am not by any means placing myself in control of the organization. Just putting the first steps in place that will benefit us as we move forward.

We have many good people on our side.

Please everybody, maintain your enthusiasm and cohesion. Together we WILL win this. (I have a feeling that I am going to be saying this a lot - it's important). 

What to do?

I have been asked by many people why I have not yet commented more on this issue. The reason is simply that we (the shareholders) have a number of courses open to us to achieve a number of different outcomes and I want to be sure in my mind that my actions achieve the best possible outcome for us, the shareholders.


One of those options is to sell the Company into the takeover. I can say that, clearly, the current offer of $3.55 per share is insulting and a long way lower than a price that I would want before I was to accept the option of selling the Company.


I can also confidently state that we now have well in excess of the required 25% of shares to stop this takeover, if, in the end, we determine that that is the best course of action to take.


All I ask of everybody is that we work together towards achieving a better outcome for ourselves than has been proposed. Please maintain your interest and convictions - don't roll over to this deal. Together we can improve the position of every one of us.


I have been pretty much strapped to my computer for the last two days. I am now going to take a break and play with my dogs. I need the reassurance that they provide.

Trying to make sense of this.

Where do we go from here?


Rather than jump in immediately with an emotive response to this takeover offer, I have tried to take a little time, allow my emotions to settle down and try to reach some conclusions.


It is clear that whatever happens now, we cannot go back to the situation we had before this bombshell was dropped on us. In actuality, we need to establish and find our way to, the "least worst" outcome for ourselves. We probably cannot "unscramble the egg".


As you might imagine, I, perhaps more than many, feel personally betrayed. However, my hurt feelings actually have no place in this discussion so I will try my hardest to put them aside in favour of a dispassionate discussion of our situation.


Many of us began our investment in CST anything up to 10 years ago. CST was a speculative investment but the research that many of us did allowed us to believe that this investment had a very good chance of bearing fruit. As investors in a business we accepted the difficulties encountered along the way and were content to exchange immediate rewards for the potential future rewards. 


Of course, like any speculative investment, there was always the possibility of the business failing - that has always been acknowledged but still allowed a risk/reward position that was acceptable.


We were right. As time went on, the business did succeed and the risks of failure diminished, even though the rewards to us only reached a trickle. That was an acceptable position at this point in time because it was possible to see the potential for those rewards to increase in time. 


At any point during our investment we had the choice of whether to "stay or go". Based upon what we saw and what we were told, most of us made the choice to stay. As of last Friday, everybody had used their right to make that choice. This is an important point. As of Monday, that choice has largely been taken away from us. We have now pretty much been been told that regardless of what we think about the future we must sell our shares in the Company at a specific price.


Bear in mind that  the Directors number one priority is to run the Company to the maximum benefit of the shareholders. All other considerations, even curing the world of TB, are of a lower priority. 


Now, maybe the Directors have some good reasons as to why they feel that the future of QFT is enhanced by it being snuggled between the buttocks of a giant International Company. That may even be true - I don't know. More importantly, I don't care - this deal excises me from the story. However, as stated above, the advancement of QFT, per se, should not be the number one priority of the Directors. 


The priority of the Directors to run the Company to the maximum benefit of the shareholders is the direct outcome of their decision to float the Company some ten years ago. Just as we as investors accept that investing in a publicly listed company rather than some other investment comes with some advantages and some disadvantages, the decision of the Directors to float the Company ten years ago comes with some advantages and disadvantages for them. They gain the advantage of using our capital to build the company but they have the "disadvantage" of being answerable to the shareholders and some very specific legal requirements.


For this "deal" to be "fair" to the shareholders they must prove that selling our shares at $3.55 is a better financial outcome for us than continuing to run the Company as it is - even if that would mean that sales of QFT might be larger with CST operating as a subsidiary of a giant International Company (which is irrelevant to us). 


I will be most interested to see both the Independent Valuation and the assumptions that lie behind that valuation. This is crucial. I might say that statements such as "x% above VWAP" are nonsense. For we investors this is not about a premium to the share price. It is about receiving true value for our shares and being able to make an appropriate decision for ourselves. You cannot validate an offer price by comparing it to the Share Price. The Share Price rarely reflects the true value of a Company. Nobody can convince me that the "value" of the Company has changed from $2.40 to $3.00 in the matter of a couple of months. 


If nothing changes, I will vote NO on this deal. 


I will, no doubt, have much more to say on this.

CST Takeover

Just in case some of you haven't caught up with the news, there has been a takeover of CST announced at $3.55. The Directors are recommending acceptance.


I won't make any comment at this stage, until I have absorbed all the facts and information.

http://www.cellestis.com/IRM/Company/ShowPage.aspx?CPID=1871&EID=27240511