Sold half of Premier Exhibitions (PRXI) position
Bids on the Titanic artifacts and intellectual property put up for auction by Premier are due by next Monday. Guernsey’s, the auction house, will review the bids next week and declare a winner, that is, if there are any suitable bids. The new owner must agree to the requirements established by the court and be approved, thus the lag between the due date for the bids and the announcement of a winner.
I have no idea whether there will be a successful bidder. No idea whether if there is a successful bidder the amount bid will be less than, equal to or more than the appraised value of the auction items. Yesterday, the market cap of Premier stood at $165 million, well below the $189 million appraised value of the auction items. Mr. Market obviously thinks that either the auction will bring less than the appraised value or that management somehow will not return the entire value raised at the auction to shareholders.
My original investment thesis was based on realizing the value of the Titanic assets. That has happened to a greater or lesser extent with the recent share price runup, but the risk has also risen commensurately. The upcoming auction will basically determine value of the company. For my part I’m an investor not a speculator, so I’m a bit risk averse. With that in mind I’ve sold half my position in Premier at $3.48, locking in a greater than 100% gain.