Remark Media Update
We have recently posted several updates on Remark Media that were very bullish and we maintain that long-term bullishness. However, we do believe that the company’s current financial position will require the company to raise money in the near term and this makes us take pause from a near term urgency to buy the shares. While we are not suggesting that Groove participants should sell shares at these levels (because the stock remains cheap and illiquid)) we will be watching to see if the company does a raise similar to prior placements – where the company took care to limit dilution to the degree possible. We believe that much of how such an offering will be received will (as always) be heavily dependent upon the terms and timing, but note that this opens up the possibility for near term weakness in the shares. Remark remains a great holding for the long-term, but those considering adding to their holdings or establishing a new position might want to wait and see because the stock could trade lower depending on the terms of the financing. If it does, we would view any such weakness as simply an opportunity to add shares or establish a position at a lower price.
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