SGI drop 20% today to 10.5p on its announcement of strategic review and formal sales process. Paul Scott’s stand-in comments on the news over at Stockopedia (http://www.stockopedia.com/content/small-cap-value-report-12-june-2017-sgi-motr-ntbr-kbt-trd-193329/):
> So I’m not tempted to dabble in SGI shares in these conditions.
SGI has a stock rank of 25, and is classified by Stockopedia as a Value Trap.
I last wrote about SGI back in Nov 2015 (https://mcturra2000.wordpress.com/2015/11/20/sgi-l-stanley-gibbons-a-comment-on-the-balance-sheet/), where I said that
> I think that this company is a lot weaker than many realise.
Those words have turned out to be prophetic indeed. The share price was 97.99p at the time. I had noted that it had negative free cashflow for at least three years. That trend has continued. Its net debt is close to its market cap, a sure sign that the company is in distress.
It appears that some bulletin board posters are expecting nothing less than 20p per share from a takeover. Given that the shares currently stand at about half that price, and the shares have never reached 20p in the past year, I would say that an offer of 20p is unlikely.