Premier Exhibitons: an even better short?

No news on the Titanic sale adds some validation to my thesis that the Titanic auction failed and that the assets aren’t going to sell for anywhere near $190M (see all my posts about PRXI).  As the valuation of Premier depends almost entirely on the value of the Titanic artifacts, this stock may plummet when investors realize that the Titanic artifacts can’t be sold for much.

The conference call for quarterly earnings was a little bizarre.  From Seeking Alpha’s transcript:

Sam Weiser

In terms of the Titanic sale, we do not have an update from our previous call, but rather continued working towards monetizing the assets as we’ve already described. As you know, a consortium of individuals has signed a non-binding letter of intent to purchase the stock of RMS Titanic, Inc. for educational, regional, development and cultural purposes. Completing the transaction is subject to the parties negotiating binding purchase agreements, obtaining requisite financing commitments and other approvals and, therefore, the execution of the LOI does not guarantee that a purchase will be consummated. As this process is ongoing and confidential, we will provide additional information as material developments warrant, but we’ll not be taking questions on this subject during the Q&A portion of today’s call.


Operator, with that, I am happy to open the lines for questions about our operating results although we will not be able to provide additional information on the Titanic sale at this time. Thank you.

If I was selling an asset, I would tell the world that it’s the greatest thing since sliced bread!  I would expect management to do a little promotion, show a little optimism, and put on a happy face!  Even if the Titanic assets aren’t going to sell, you can always put spin on it.  Repeat information that was stated in the past.  You could say: “A court appraisal valued our Titanic assets at $190M and we are working diligently on monetizing this asset.  Unfortunately, we will not discuss the details of the Titanic sale process as we are involved in sensitive and confidential conversations regarding the assets.  Nonetheless, if such a sale occurs, we will definitely pursue the most tax-efficient way of distributing these proceeds to our shareholders and unlocking shareholder value.  I am a shareholder too and am working really hard to maximize the after-tax return of our shares.”  A smarter man would do a better job of saying nothing.

Instead, Weiser seems to be very defensive about the Titanic sale.  It is extremely likely that he has consulted a lawyer regarding how misleading he can be regarding the Titanic sale without facing legal liability.  To me, his defensiveness is a tell.  He probably knows that the Titanic auction was a failure.

*Disclosure:  Short PRXI.

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