Investment Q&A

The company has had multiple 'screw ups' over the past two years, but we admit it is getting more interesting despite its (weak) pedigree. It has had a 'proposed' buyout at $20. Management indicated it wanted to take it private at higher levels about 18 months ago (debatable whether this was legit). It had another (undisclosed price and buyer) offer in August of last year. It did a very large share buyback in 2023. It is losing money, but cash flow is still positive. Its small size and checked history add risks, as does its high debt. But we think management is realizing that it is never going to get a premium multiple like it has before, so they are likely thinking of ways to exit the public market. It can be very hard to catch a falling knife. But there is a business here with $500M in revenue, trading at 1X sales. Insiders own 9%, and Plantro (which was the $20 offer) owns 12%. In a market bounce DND likely goes above $10 again, and with any corporate action higher. Further downside might be 20% or so. It is hard to endorse on simply the possibility of something happening, but we think this is probably more likely now than it was before, because valuation has shifted so dramatically.