Often, companies that are worthwhile are fought over, or public announcements of plans to purchase by one company are made by another. It's not that often that someone says "hey, I think I'll sell my company, even though there aren't any buyers that have spoken up..."
Such is the case with Getty Images (NYSE: GYI), who, is now supposedly up for sale, according to the New York Times - Getty Images Up for Sale, Could Fetch $1.5 Billion.
A few interesting insights:
"A sale is not assured, because the tightening of the high-yield debt markets has cut off private equity firms from the lifeblood of their business, making it harder to finance deals."Which means that when someone offers up $1B, which would be a 2/3 valuation, in the end, that'll mean that the valuation is more along the lines of 2/3 of Friday's stock close, or about $14 a share, assuming the $1.5B valuation was calculated on that closing price. Nice price. Still too much for server rack after server rack of
“Getty Images continues to be a company in transition, adjusting from being the leading player in an oligopolistic market to being one of many players in a highly competitive market,” Barbara Coffey, a research analyst with Kaufman Brothers, wrote in a research note earlier this month.I guess "a company in transition" is the latest buzz-phrase for failing companies and business models. The stock already tanked below $22, when Coffey had as her target price $24. Bad call there, and why don't you just call a spade a spade and say, in the words of Gordon Gecko, "this is just another dog with fleas..."
"Still, some analysts worry that other, cheaper rivals could continue undercutting the company’s prices."No, really? C'mon! Say it ain't so!
I suppose that this will give JDK his easy exit, either with a sale, or the reason he exited being that it didn't sell. Further, this will give Getty/Klein/et al reason to demure and otherwise be tight-lipped during their Q4 call at the end of this month. I suspect we'll hear a lot of "well, in light of our planned sale...", or some other diversionary tactic to distract everyone from the reality that it will be a worse Q4 than even their lowered expectations predicted.
Getty's failed to live up to the maxim - "buy low, sell high". Unless you have some sub-$20/share options, that is, and even then, your time is short to get out before you go underwater.
Note: I have not ever, do not now, and have no plans to hold GYI.
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