| To: Sir Auric Goldfinger who wrote (642) | 8/23/2001 7:48:50 PM | | From: RockyBalboa | | | | Corporate Raiders Becomes Cheerleader,
But May Want to Reapply for Old Job
By Devon Spurgeon
Staff Reporter of The Wall Street Journal
Minneapolis financier Irwin L. Jacobs has swung from corporate raider to company cheerleader. But the way his dice have been landing lately, he might want to reapply for his old job.
On and off for the past two decades, investors have keenly watched the deal-making of the man once dubbed "Irv the Liquidator," for his penchant of snapping up companies at a bargain and selling the assets at a profit. Mr. Jacobs made millions of dollars raiding companies during the go-go days of the 1980s. A shrewd combatant, he purchased large positions in companies such as Walt Disney Co., Avon Products Inc. and ITT Corp. He often angled for a massive restructuring, directors would quake at the mention of his name, and, after a stock run-up, he would sell his stake.
Then last year, he took on an entirely new role, as public-company defender -- as Irv the Savior -- buying stakes in two down-and-out companies, Conseco Inc. and AremisSoft Corp., and then publicly backing them against critics. "There is no particular thrill in taking on a hostile takeover or a fight," explains the somewhat-mellowed, 60-year-old Mr. Jacobs, who temporarily left the world of market movers-and-shakers in the 1990s. Instead, he spent his time casting fishing lines, trying to popularize bass fishing as a competitive sport, and building his privately held company, Genmar Holdings Inc., into one of the nation's largest boat makers.
Now, with his bets on Conseco and AremisSoft turning sour, he has been chastened in his new role. "Everything I did, I did because I believed it," the salt-and-pepper-haired investor told Dow Jones Newswires recently. "I'm not Don Quixote or Robin Hood. I just made my investments." He added, "Life is full of experiences every day, and we learn right and wrong."
Mr. Jacobs's first corporate damsel in distress was insurance company and mobile-home financier Conseco, in which he said he has bought "millions" of shares at prices ranging from $3.875 to $19. In mid-2000, dismayed by the short-seller buzz and the constant criticism of Conseco, he created his own Web site, launching irwinljacobs.com , to stand up for his stock picks. "Under the securities laws, these companies can't defend themselves," he says.
On Sept. 11, Mr. Jacobs posted his first musings on Conseco. "Under Gary Wendt's leadership, I believe the future for Conseco and its shareholders never looked better," he wrote. He posted nine more notes in defense of Conseco, the last one in June. In a May ad in The Wall Street Journal, he even pummeled a Salomon Smith Barney stock analyst for his bearish views of Conseco, and boasted about buying several hundred thousand shares at the time for $18 to $19 a share.
After the company reported disappointing results and issued an earnings warning recently, Conseco's stock dropped. It closed Wednesday at $8.95. Mr. Jacobs now is mum on the topic of Conseco, including whether he has lost money overall on his investment.
Mr. Jacobs also had been a big booster of AremisSoft. As of June 1, Mr. Jacobs owned 3.6 million shares, or 9.15% of AremisSoft. Earlier this summer, he began writing about AremisSoft, launching a full-scale assault on the naysayers. "I am absolutely convinced that the short-sellers work in concert every day in an attempt to orchestrate the price of AremisSoft's stock down," he wrote, on June 4.
All in all, Mr. Jacobs had posted more than 30 notes on his Web site defending the company from critics who were questioning the value of its overseas contracts, specifically those with the country of Bulgaria and the Indian army. In a posting June 13, Mr. Jacobs said he "had the opportunity to personally inspect certain books and records of AremisSoft's business relationship in Bulgaria." Mr. Jacobs said he could "unequivocally confirm" payments AremisSoft received from Bulgaria.
He continued to defend the company right up until the software maker disclosed late last month that the Securities and Exchange Commission was investigating its accounting practices. The company's stock, which already had dropped to $11.19 from its 52-week high of $28.25, hasn't traded on the Nasdaq since then. Mr. Jacobs bought 541,000 of his AremisSoft shares for about $12.50 a share, but won't say what he paid for the rest, so the extent of his loss isn't known.
"It wasn't like I dreamed this stuff up," Mr. Jacobs now says. "It is clear that what I saw, and what I was told, don't stand up at this point." AremisSoft declined to comment. In hindsight, Mr. Jacobs is a bit circumspect. "If I owe an apology I will be a big enough person to do it," he says.
As part of a quieter persona, Mr. Jacobs says he will no longer disclose how many shares he holds or discuss his selling patterns.
The events of this summer so distracted Mr. Jacobs that he says he has been to his vacation home in northern Minnesota only twice. Defending companies is too time-consuming, he says. He vows not to use his Web site anymore to attack short-sellers, analysts and journalists who can jeopardize the price of one of his stocks. The site will now be primarily biographical, he says, and may even be taken down.
"I have to sit back and watch the chips fall where they fall," Mr. Jacobs says. "You won't see me active anymore."
Maybe not as a corporate defender, anyway. In the interview, Mr. Jacobs happened to mention that he is still unhappy with the performance of his stock in Clarent Corp., the Redwood City, Calif., maker of communications software. He owns 3.1 million shares, or 7.69%. Mr. Jacobs bought about 1.1 million shares at $9.19 to $12.07 each, but won't say what he paid for the other shares. Wednesday, Clarent closed at $5.83 in Nasdaq trading at 4 p.m.
"I don't think management knows how to run the financial side," he says. "The company should be sold or merged with someone plain and simple. I bought it as an opportunity, not in a hostile way." Kathleen Noonan, a spokeswoman for Clarent, declined to comment on Mr. Jacobs's opinions.
-- Joseph Hallinan contributed to this article. |
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| To: RockyBalboa who wrote (644) | 8/30/2001 10:01:02 AM | | From: Kevin Podsiadlik | | | | FWIW:
AREM reported delisting notice yesterday afternoon and is trading on the pink sheets as of today. Opened around $1.60.
And now, a moment of silence for the roll call of the victims of this company. (Please ignore the opening paragraphs due to risk of howls of laughter which would ruin the somberness of this occasion.)
messages.yahoo.com |
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| To: RockyBalboa who wrote (647) | 8/30/2001 11:53:32 AM | | From: Craig Bartels | | | | I congratulate the shorts on this one. But, who believes it is only worth 1.60? Jeez, I know they made some mistakes, lets say that their earnings have only been 1/4 of what they have said, their P/E would still be under 10...
I wonder if jacobs will just buy the company now..
chbartel |
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| To: Craig Bartels who wrote (648) | 8/30/2001 12:57:54 PM | | From: RockyBalboa | | | | I know pink sheet companies which trade at 25 cents and post gains. All a matter of trust. Could AREM be trusted? Market says no.
Can I trust AREM? No, are `there current financial statements around?
How could you possibly know what the P/E is? |
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