Ancestry.com (Nasdaq:ACOM) is very anxious to sell itself to a major shareholder Spectrum Equity. Spectrum already owns 30% so it will probably go through. But look at the earnings in the past year and decide if the price is undervalued. Earnings are beating street expectations and management guidance. Usually blowing out the numbers big time.
There are many investigations for breach of fiduciary trust. CEO Tim Sullivan and CFO Howard Hochhauser, who stand to keep a “significant majority” of ownership invested in the company after the merger.
Anytime you look at something it stinks. What you need is an alternative activist shareholder who will stir things up and get some injunctions delaying the deal if not cancelling it. In the meantime you sue and try to force the price up.
Usually management are less than competent. But this time they know a good thing when they see it and want to steal from the shareholders.
George Gutowski writes from a caveat emptor perspective. Follow him on twitter@financialskepti.