My quick take on PRXI (Premier Exhibitions)

I just don’t think it’s deeply undervalued.  (VIC writeups here and here.)

1- In theory, its Titanic assets are worth a lot.  However, you should read the court filings for yourself.  If Premier Exhibitions wants to sell the Titanic artifacts, it has to sell all of them together.  It cannot sell them separately.  This will make them difficult to sell.  On top of that, Premier will want to lease/rent back the artifacts that it is using for its successful Titanic exhibition.

Premier for a long time has been trying to get permission to sell the artifacts piece by piece.  The judge is NOT happy with them for trying to do this.  I suspect that the judge’s emotions will rule the day and Premier will not get what it wants.

From the buyer’s point of view, the demand may be questionable.  You have to pay ~$200M to buy the artifacts and you are obligated to maintain them (if you cannot maintain the artifacts, you will not be allowed to buy them).  And what is their utility?  I only see somebody buying them for the same reason they buy a piece of artwork.  However, to exhibit these artifacts in your house… you will have to rotate the artifacts in/out to prevent damage associated with exhibiting them (as is the case with the Titanic exhibit).  Is there a market for this?  Maybe.  But figuring out the market for this asset is too hard for me.

2- Management: The old management was very good at running an exhibitions… the new one not so much.  That is why Premier will not be able to maintain its historically high returns on equity.  This is a business where Premier doesn’t have any special advantage or economic moat.

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