3SOF

David Randolph · May 03, 2007, 06:17:26 PM

I wonder why I see many more views on this thread than on other threads. Please don't buy this stock just because it is the biggest loser of the Main Portfolio. If I'm losing it means I was probably wrong when I bought the stock and probably it is wrong for me to keep holding it, so why are you buying this loser instead of the winners?

Anyway, I've been here before, remember DIET? I waited for months and months for a catalyst, but sold the stock before the catalyst because of a general market worry, and finally a couple of weeks later that catalyst was out and the stock rallied.

It's not going to happen again. For the better or worst, I'm not going to sell MSI before I know about FOH's financial details. I'll keep holding MSI.

wxmang · May 03, 2007, 06:55:22 PM

I think everyone who owns the stock is waiting until May 15th.
I really have to assume that MSI would mention at least something about how the merger will affect the company in some way or another.
I think if they don't alot of folks are gonna bale out.
Maybe MSI wants the stock to drift lower so the insiders can buy some more stock and cheap before the merger. Kind of crappy if you ask me. But, that is how the game is played, I guess.

Check out the Insider Buys here:
http://www.secform4.com/insider-trading/93631.htm

buddjas1 · May 03, 2007, 07:29:39 PM

Quote from: wxmang on May 03, 2007, 06:55:22 PM
I really have to assume that MSI would mention at least something about how the merger will affect the company in some way or another.

MSI is pretending that it cannot reveal FOH financials until the SEC finishes a review of the shareholder vote proxy. MSI is wrong (I do believe), but, in any event, that is the story.

David Randolph · May 04, 2007, 04:36:51 PM

QuoteI think everyone who owns the stock is waiting until May 15th.
I really have to assume that MSI would mention at least something about how the merger will affect the company in some way or another.
I think if they don't a lot of folks are gonna bale out.

Yes, they have to say something. Maybe not what we want to hear (FOH's financial details), but definitely something.

QuoteMaybe MSI wants the stock to drift lower so the insiders can buy some more stock and cheap before the merger. Kind of crappy if you ask me. But, that is how the game is played, I guess.

Nah, if insiders want shares they just issue new ones or grant themselves options. I used to think that possibility could happen, but I've never seen it in real life, never seen a corporate official talk bearish about his company because he wanted to buy shares.

QuoteCheck out the Insider Buys here:
http://www.secform4.com/insider-trading/93631.htm

See, those stocks were not really bought, they were awarded.

QuoteMSI is pretending that it cannot reveal FOH financials until the SEC finishes a review of the shareholder vote proxy. MSI is wrong (I do believe), but, in any event, that is the story.

Not a bad excuse. Perhaps the SEC told them that disclosing FOH's financial details would have a significant and material impact on MSI's stock price, so they can't do it while the merger isn't closed.

Nothing changed on MSI today, I'll keep holding the stock.

David Randolph · May 07, 2007, 05:06:28 PM

Still nothing about FOH's financial details, but we got ourselves a bit of a bounce on MSI. Not enough to make anyone happy, but maybe just a bit more hopeful that we'll get out of the hole in this stock. As I've explained throughout this thread, the stock seems very undervalued to me, but we'll only be sure when those financial details are published, because, even though there's no indication of it (quite the opposite), Frederick's of Hollywood can be in terrible shape.

Let's check www.fredericks.com today. We wish the business fundamentals are as beautiful as these ladies. We'll perhaps get some clues over the Q1 results presentation, which will probably happen near the May 16th deadline.

I'll keep on holding MSI.

David Randolph · May 08, 2007, 04:57:57 PM

Again, no news out today. Also no technical developments. I'll keep holding and waiting.

David Randolph · May 09, 2007, 04:20:24 PM

I searched Google for something new on Frederick's of Hollywood, but found nothing. The stock closed unchanged on just 11,200 shares traded. There are no news out since April 13. 1st quarter results will be published over the next seven days. I'll keep holding MSI.

rud56789 · May 10, 2007, 03:23:08 PM

There have been a couple of new institutional buyers in the past quarter who seem to agree with David about this stocks potential.

ROYCE & ASSOCIATES 3/31/2007 1,012,300 1,012,300 New
DIMENSIONAL FUND ADVISORS 3/31/2007 218,423 218,423 New
APTUS CAPITAL LLC 3/31/2007 44,000 44,000 New

David Randolph · May 10, 2007, 05:21:43 PM

Quote from: rud56789 on May 10, 2007, 03:23:08 PM
There have been a couple of new institutional buyers in the past quarter who seem to agree with David about this stocks potential.

ROYCE & ASSOCIATES 3/31/2007 1,012,300 1,012,300 New
DIMENSIONAL FUND ADVISORS 3/31/2007 218,423 218,423 New
APTUS CAPITAL LLC 3/31/2007 44,000 44,000 New

That's an interesting information that hasn't been previously discussed on this thread rud56789, thanks

What is your source for it? I find it strange that Royce & Associates didn't file a form SC13D disclosing ownership with the SEC, since according to your numbers they own about 6% of the outstanding shares.

There's no incentive to push MSI up or down until there's some more information about FOH's financial details. As you can read in this thread, I believe the stock is undervalued at this point. I think it is worth something like $3.5, but only after knowing FOH's financial picture I can be sure of that.

Without anything better to do, let's check www.fredericks.com today. Not a bad sight.

I'll continue holding MSI.

wxmang · May 10, 2007, 05:53:24 PM

This just in on MSI:

http://biz.yahoo.com/e/070510/msi10-q.html

Wxmang

Se7en · May 10, 2007, 05:54:04 PM

Form 10-Q for MOVIE STAR INC /NY/
10-May-2007

http://biz.yahoo.com/e/070510/msi10-q.html

The proposed merger is not expected to be completed until the fourth calendar quarter of 2007. The later than anticipated timing relates to a delay in the preparation of Frederick's audited financial statements for the fiscal years ended July 29, 2006 and July 30, 2005....

Se7en · May 10, 2007, 05:59:09 PM

Movie Star, Inc., Reports Fiscal 2007 Third-Quarter and Nine-Month Financial Results
Thursday May 10, 5:56 pm ET

http://biz.yahoo.com/bw/070510/20070510006327.html?.v=1

David Randolph · May 10, 2007, 06:26:52 PM

Thanks for posting the news, it seems I need to make a new update on MSI before tomorrow's open, but now it is too late here and I'm too sleepy to get into it. I'll do it tomorrow before the open and send it with the daily newsletter.

rud56789 · May 10, 2007, 07:26:33 PM

Quote from: David Randolph on May 10, 2007, 05:21:43 PM
Quote from: rud56789 on May 10, 2007, 03:23:08 PM
There have been a couple of new institutional buyers in the past quarter who seem to agree with David about this stocks potential.

ROYCE & ASSOCIATES 3/31/2007 1,012,300 1,012,300 New
DIMENSIONAL FUND ADVISORS 3/31/2007 218,423 218,423 New
APTUS CAPITAL LLC 3/31/2007 44,000 44,000 New

That's an interesting information that hasn't been previously discussed on this thread rud56789, thanks

What is your source for it? I find it strange that Royce & Associates didn't file a form SC13D disclosing ownership with the SEC, since according to your numbers they own about 6% of the outstanding shares.

The new institutional ownership is listed on Nadaq.com:

http://www.nasdaq.com/reference/ownership.stm

buddjas1 · May 10, 2007, 09:28:31 PM

Well, looks like it will be a long summer (and fall). The cash position of $82,000 really scares me. I hope that MSI will not need to raise cash. We all know what that means. Revenue growth looks ok, but expenditures are out of control. Even subtracting the merger related fees, the company still lost money for the quarter. Dilution was pretty high, with 600,000 shares issued over the ttm. Per the 10Q, the bank holds substantially all of MSI's assets as collateral for a $30,000,000 line of credit. MSI is much worse off financially than it ever led on and now I understand the real reason for the "merger." Without FOH, MSI is clearly a sub-$1.00 stock.

The delay of the merger until Q4 is really disappointing. Despite what MSI says, there is no excuse. Mergers of much much larger companies do not take that long. What is more disappointing is that IR lied to me about the reason for the delay. Now we know that the delay has nothing to do with the SEC (always easy to blame the government) but, rather, FOH's inability to maintain an accounting. IR should just provide no comment rather than lying to shareholders. Unfortunately, I hear more lies from IR (not just MSI's IR--all IR) than I do the truth. I guess I will have to start audio-recording my calls with them.

I will continue holding until the merger is complete, but only because I have too. I am holding a large loss and I have a rule that I cannot sell for a loss unless there is no chance for recovery. I predict a sharp sell-off over the next month to just over $1.00 (I hope I am wrong). MSI tested the patience of shareholders this long and I don't think any shareholders still holding for a gain will want to sit and wait another six months. There is still a lot of profits left to be locked in.

News:

FOH