It pays to be patient in this market. In May last year, entrepreneurs Craig Mathieson and Nir Pizmony were all set to launch a takeover offer for toy company Funtastic at 80c a share. Yesterday, the pair agreed to underwrite a capital raising that will deliver them a 20% stake in the company for 15c a share. The lesson for entrepreneurs who are looking for bargains is clear: if you target is looking wobbly in any way shape or form, take a deep breath, wait a few weeks and make a lower offer.
Of course, Mathieson and Pizmony face a tough job in turning Funtastic around. The company has been destabilised badly in the last few years (most recently by the collapse of ABC Learning, which was a key customer) and the retail environment is terrible. It might take a while before we know if this was a bargain buy or a dud buy.
You can help us (and help yourself)
Small and medium businesses and startups have never needed credible, independent journalism and information more than now.
That’s our job at SmartCompany: to keep you informed with the news, interviews and analysis you need to manage your way through this unprecedented crisis.
Now, there’s a way you can help us keep doing this: by becoming a SmartCompany supporter.
Even a small contribution will help us to keep doing the journalism that keeps Australia’s entrepreneurs informed.