That’s the big question… what does 2014 hold for PNCH ? There are some who believe Mr. Samblis walks on water and will pull the company out of near bankruptcy and emerge so strong the stock PPS soars to over a dollar or more. Just buy more and hold they say… Steve will deliver!
Then there are disbelievers. These are the people that claim to see the writing on the wall as they say. They understand their investment is worthless, and Mr. Steve Samblis alone is to blame for the bad decisions that led to the company’s downfall.
Then there are the in-between’s. The in-between’s understand the severity of the situation, understand their investment is very likely lost, understand Mr. Samblis will very likely not change in order to make things better, and no amount of avid blind support will change the situation at hand. However… they still hold out unsubstantiated hope. They know in their logical mind that nothing will bring this company back without massive changes (which are unlikely to happen), but using their emotional mind they still hold some hope that it will. They hope for a miracle.
We have given the possibilities some thought. We predict… that PNCH (the public company) will be absorbed by Mr. Joseph Collins of Punch TV and as a result will become the new public company using the same ticker and a modest change to the name but still reflecting Punch in some fashion. Mr. Samblis will be forced to take a modest payment in return for his agreement to the terms of the settlement. Let us lay out the reasoning for this bold prediction. Depending on which group above you align yourself with will determine your reaction to our prediction.
The substance of our prediction is the 50-million dollar lawsuit, however other factors play a role in the prediction. Although the lawsuit (as of this writing, and as far as we know) is still “pending”. That is a wild card that could sway any outcome supporting our prediction. If the lawsuit becomes a reality (and it likely will), then our prediction, in our minds, becomes a certainty. Mr. Samblis will have no choice but to settle… and any settlement will likely include Mr. Samblis giving up the company as a deal breaker. If the lawsuit becomes a reality and Mr. Samblis does not settle, which given his previous actions that demonstrate his arrogance, he may bet the farm and lose even the pittance he would have received in any settlement. Also, and reinforcing our opinion as to the winner in the suit, is that Mr. Collins appears to have far more resources to wage a court battle than Mr. Samblis does. In most legal actions, the side with the most resources (money to fight) wins.
We have previously laid out the merits of the case against Mr. Samblis here so we won’t list them in this post, but if one looks logically at the evidence, it appears Mr. Collins has a VERY strong case against Mr. Samblis. Yes, as we said in the referenced post, anything can happen, but we think Mr. Collins has a better than average shot at prevailing in this lawsuit.
Why would Mr. Samblis accept a settlement that involves him losing his company? We think because faced with the likelihood of a complete legal loss, and likely owing a substantial sum to Mr. Collins for the harm to the Punch TV business if the action would actually go to trial, coupled with the legal fees to fight the suit… he will accept something rather than noting, and likely be in debt to Mr. Collins for the damages accessed. Mr. Samblis walking away with some pocket change is far more favorable than losing his company AND being in debt to Mr. Collins for the damages accessed by the court, AND being bankrupt by the legal fees fighting a lawsuit he has very little chance of winning. Also, Mr. Samblis’s reputation is, shall we say, tarnished. Walking away with some pocket change will allow him to break free from the Punch name and likely start another company, free from the past baggage of the Punch issues, and the current group of investors that have lost big under his leadership. Given that Mr. Samblis likely blames the company’s downfall on others (never himself), he will likely not associate his past actions as negatively impacting any new venture he may attempt. He would likely welcome an opportunity at this point to free himself from his current situation… i.e. his company’s stock is in the toilet (as in near worthless), he is about out of shares to sell to raise cash, many investors think he is incompetent, and there is little hope of anything changing significantly in the near future to turn things around before he runs completely out of funds to keep the company operating.
For shareholders, the above may be just what the doctor ordered ! It’s highly unlikely the company will survive under Mr. Samblis’s leadership. However, Mr. Collins at the helm may just be the spark that ignites a fire under the PPS. Investors knowing Mr. Samblis is no longer involved with the company, may feel more secure about investing in it, or more secure that their current investment now has a fighting chance of improvement. Say what you will about Mr. Collins, we doubt he would put himself in some of the situations investors found themselves in with Mr. Samblis. If you have followed the progress of Punch TV since the breakup, you will see that Mr. Collins has progressed much farther than Mr. Samblis has in the same amount of time, and exhibited far more professionalism while doing such. Mr. Collins has been in the broadcasting business much longer than Mr. Samblis. With investment funds behind him, Mr. Collins is likely to progress much farther in a shorter amount of time than Mr. Samblis could ever hope to. Simply compare the achievements of both men since the breakup and we are confident you will come to the same conclusion.
Even if Mr. Samblis would win the lawsuit, which would be like the odds of winning the Powerball lottery, AND Mr. Samblis changed the ticker symbol, AND Mr. Samblis changed the name of the company… the one remaining factor would be Mr. Samblis would still be the CEO. Even with a new company name, the most significant factor that caused the current sad state of affairs is still present. As they say, doing the same thing over and over and expecting a different outcome is the true definition of insanity.
When investing in a company, you are really investing in the leadership’s skills and knowledge of the person in charge to make the right decisions to grow the company. Where has Mr. Samblis’s leadership brought the company to date??? Simply changing the company name and trading symbol does no more than changing the label on expired meat. Does anyone really think that potential new investors in the same company-new-name will not find history on Mr. Samblis? Would new investors be so naïve to think Mr. Samblis could do any better with the newly named company just because the name was changed ??? Would CURRENT investors think things will change just because the name has changed???
So… we think everyone can agree… SOMETHING will happen… it’s simply a matter of WHAT will happen. Neither party is going to let the current situation continue as it is. Mr. Collins feels he is being harmed, and Mr. Samblis is in a desperate situation with the current condition of his company. What will happen ???
Think we are nuts ? Then what do YOU think will happen ? Let’s hear YOUR prediction on how this plays out… and why ! What would you like to see happen, and why ? Do you think Mr. Samblis has the leadership skills to turn his company around even if the lawsuit were not a factor, and why ? And if you think Mr. Samblis does have the leadership skills to turn this company around… why hasn’t he done so in order to prevent the current condition of the company ? IF… Mr. Collins becomes CEO of the public company that is now PNCH, would you feel more or less confident that your investment will increase in value ? If Mr. Samblis accepts a settlement that allows him to walk away and start a new company… would you invest in his new company ???
Hopefully we have provided some food for thought. Regardless of you publicizing your thoughts and predictions here, or other public venues… be thinking about the possibilities and likelihoods of how this PNCH thing could play out. Again, you must agree… SOMETHING will happen, it’s just a matter of WHAT !
Happy New Year !