Checking in on the sum of the parts analysis of ReHo's valuation (cash has been reduced by the $1 per share dividend):
ReHo still seems very cheap at current levels, even if an IPO is a year off. But why was the IPO delayed?
There was a Seeking Alpha article published a little over a month ago that did a good job of laying out the liquidation thesis, but a few commenters pointed out that an IPO might not close the valuation gap because Sewko would still be a holding company of publicly traded subsidiaries and still deserved a conglomerate discount. I had the link to the preliminary prospectus, but its now dead, luckily I printed out the corporate structure and ownership as I was struggling with the question of whether Sewko deserves a discount. The publicly traded subsidiaries are highlighted in yellow. Hopefully its readable.
|Sewko Prelim Prospectus|
I've also been corresponding with another ReHo shareholder that has concerns about the company's lack of operating cash flow for the past several years, which is certainly a bit concerning on the surface, but given the complexities of the consolidated accounting rules and different holding company structures I hope there's a good explanation?
Given the failed IPO, I think its wise to be a bit skeptical of the full NAV as a short term price target. I'm open to any thoughts or comments from other holders on why the IPO might have been pulled, but these were a few thoughts I had today after hearing the bad news. I'm still holding, but my conviction in the liquidation thesis has been taken down a notch, it might be time to take a closer look under the hood.
Disclosure: I own shares of RHDGF