American Apparel is having a stupid fight with Dov Charney. The Board has adopted a poison pill. Charney has some 27% and reputedly through friendly Wall Street entities controls up to 45% wants his company back. American Apparel is considered a sinking ship shareholders are only too happy to sell shares and be rid of the tar baby.
The company will go private most likely. Dov Charney may get his old job back and settle into his old habits. New shareholders will take executive control and attempt to run it like a business. More incredibly beautiful girls with pouting expressions will grace magazines and bill boards.
Question is can you ring-fence Dov Charney and exploit the businesses natural assets. The price of admission seems quite low if you understand the business and are ready for more than average drama in the boardroom.
The shareholders got screwed royally. In the meantime a $10 million load is due July 4. It has cross default clauses to other debt. Messy Messy Messy. There are easier ways to lose your money.
George Gutowski writes from a caveat emptor perspective.