
Dick Smith Is the Greatest Private Equity Heist of All Time - bootload
https://foragerfunds.com/bristlemouth/dick-smith-is-the-greatest-private-equity-heist-of-all-time
======
rayiner
There is another story here. Look at the inventory level at the time of sale:
$371 million. In that time frame, they had about 1.2-1.3 billion in revenue.
That puts their inventory-turnover ratio at around 3.2-3.5. Meanwhile, Best
Buy, GameStop, hhgreg, operate at a turnover ratio approaching 5.5, and Amazon
is at over 8.[1]

So here is my alternative take on this: Woolworth's knew that retail consumer
electronics is a dead business in the age of Amazon and Apple/Microsoft
company stores. They knew that the $371 million of inventory was never going
to sell at that price. Who wants to buy 6-9 month old consumer electronics? So
they sold Dick Smith at a discount to: 1) get out of a dying business area; 2)
have someone else take on the onerous task of liquidating whatever value could
be extracted from the company.

Now, as to the subsequent sale. It's not like prospective investors didn't see
these transactions. It's not reasonable to assume that institutional
investment professionals couldn't have figured out what it takes this blog
post a couple of pages to explain. More likely, they were taking on a gamble:
here was a leaner, meaner Dicks stripped of baggage that could make profits
going forward. They lost that bet, but not because of anything the PE company
did.[1] They lost that bet because Dick Smith immediately bloated itself up
again with huge amounts of inventory, likely because the company simply wasn't
structurally capable of operating as leanly as the market now demands.

[1] [http://marketrealist.com/2015/01/best-buy-attempts-
optimize-...](http://marketrealist.com/2015/01/best-buy-attempts-optimize-
inventory-levels).

[2] This does not appear to be a case where, e.g. the PE company loaded the
target up with unsustainable debt.

~~~
roymurdock
From the article: _Remember the plant and equipment writedowns? That reduces
the annual depreciation charge by $15m. Throw in a few onerous lease
provisions and the like, totaling roughly $10m, and you can fairly easily turn
a $7m 2013 profit into a $40m forecast 2014 profit. That allows Anchorage to
confidently forecast a huge profit number and, on the back of this rosy
forecast, the business is floated for a $520m market capitalisation, some 52
times the $10m they put in._

The PE firm didn't do anything "wrong"...they simply charged (much) more than
the company was worth off the back of unrealistic and borderline fudged profit
forecasts. It's the buyers' fault for not conducting due diligence and calling
bullshit on the price set by the PE firm.

But at the end of the day $520m is peanuts compared to the size of
institutional mutual and pension funds who need to find places to invest
hundreds of billions in a multi trillion dollar market. I wouldn't be
surprised if many small-mid PE firms were using financial bloat to their
advantage - find small deals, strip and reorg, optimize profit to secure some
unreasonably high valuation, but still small in the grand scheme of things,
float the new org to huge institutional funds who are starving for new,
diversified assets to add to their portfolio in the ZIRP era.

~~~
kolbe
> It's the buyers' fault for not conducting due diligence and calling bullshit
> on the price set by the PE firm.

The problem with statements like these is that you don't even know who the
"buyer" is. It's not as cut and dry as Econ 101 would make you believe. The
true buyer of an asset can be people who have no idea they bought it.

For example, Chicago's public pensions have a shortfall of $23,000 per
resident[1] due to the poor management of its fund. This means, for all
intents and purposes, I bought shitty companies like Dick Smith. And me buying
it had nothing to do with my lack of due diligence. I have no control over it.
And neither do the teachers or policemen or 99.999% of the residents in
Chicago who end up footing the bill for this nonsense.

[1] [https://www.illinoispolicy.org/chicagos-63-billion-debt-
burd...](https://www.illinoispolicy.org/chicagos-63-billion-debt-burden/)

~~~
bmm6o
> _The true buyer of an asset can be people who have no idea they bought it._

They're the buyers in the sense that their money is funding the purchase, but
they are not the ones negotiating contracts. If their agents failed to perform
due diligence or other fiduciary duties, the fund should file a civil suit.

~~~
josho
Civil suit? I'd make the case this was fraudulent behaviour and deserves
criminal charges.

By way of analogy, if I sold you my car with an added turbo charger yielding a
20% mpg improvement, but had the side effect of causing the engine to seize
after 10,000 miles, which I neglect to tell you, then that's fraud.

Similarly, if those inventory write offs and other machinations to inflate
standard business metrics at the expense of derived metrics then cumulatively
that is fraud. Standard business metrics are used for a reason and that
understanding seems to have been exploited to hide the true status of the
business.

As a society we need to start doing a better job of seeing white collar crime
as activities like this.--Of course I'm making assumptions here, but I'd
expect due diligence would have created a paper trail that could be followed
to find evidence of statements like 'we streamlined operations that
contributed to our surge in profitability' rather than 'we aggressively wrote-
off assets and dumped inventory to show a short term surge in profits'.

~~~
bmm6o
I'm saying the hypothetical fund managers didn't uphold their duty to the
investors. I'm sure you don't mean the fund managers committed fraud.

------
amatix
Even more dodgy: Dick Smith was promoting gift cards through December with a
"bonus 10% value"[1]. No problem -- except in receivership, gift cards rank as
unsecured creditors and already aren't being honoured (even though the stores
are still operating atm). Management must have known that the banks were days
away from pulling the plug yet worked to sucker the public into giving them
further credit...

Never buy store gift cards for non-trivial amounts!

[1]
[https://twitter.com/ForagerFunds/status/684196897343471616](https://twitter.com/ForagerFunds/status/684196897343471616)
&
[https://twitter.com/ForagerFunds/status/684197213556191232](https://twitter.com/ForagerFunds/status/684197213556191232)

~~~
Someone1234
That's a legit concern about Barnes & Noble right now. But with B&N not only
gift cards, but their entire digital business (Nook).

If anyone received a B&N gift card for christmas, my advice is to spend it
soon, and spend it on physical goods -- not digital. Because when the hammer
falls your digital "purchases" are not going to be protected.

~~~
hullo
Barnes & Noble is in no danger of going out of business. Even when Borders
went kaput there was a long warning, and that was a very differently run kind
of business (although eerily on point for this topic, as it was run into the
ground by PE).

~~~
Someone1234
It lost money in four of the last five years. Ebook sales are declining, and
they've closed stores.

They've also been making a bunch of bad decisions, like investing massively
into 3D printing which hasn't paid off, and doubling down on Nook again and
again.

Coloring books did pay off a little for them, I admit, but at this point it is
more a question of "when" B&N will go bankrupt not "if."

~~~
roymurdock
One thing they do have is a stranglehold on the university bookstore market.

Judging by p. 6 of the 2014 10k [1] the number of Regular Stores has fallen
from 720 in 2010 to 661 in 2014. Conversely the number of College Stores has
grown from 637 to 700, overtaking the number of non-college outlets.

They're still losing money on college stores somehow (baffles me when students
are _forced_ to buy multiple $200 textbooks twice a year), but they lose less
on their college segment than their regular store segment.

[1]
[http://www.barnesandnobleinc.com/documents/bn_annual_report_...](http://www.barnesandnobleinc.com/documents/bn_annual_report_2014.pdf)

~~~
te
Barnes & Noble, Inc. no longer owns the university bookstores, now a separate
company (though they may still be shareholders, I haven't checked):
[https://finance.yahoo.com/news/barnes-noble-completes-
spin-o...](https://finance.yahoo.com/news/barnes-noble-completes-spin-
off-133000770.html)

------
chollida1
The private equity playbook for buying a public company:

1\. Find company with lots of cash on the books but trading very cheaply

2\. Acquire company and use cash on books to fund it

3\. Cut costs as deeply as you can and still have a company

4\. (Optional) Combine it with anther firm to create "synergy"

5\. Spin it back out for a profit

Corel was a company that got eaten and spit out in this fashion by Vector
Capital.

It was purchased for about $120 million but it had $90 million of cash on its
books, meaning the deal didn't require putting up alot of capital.

After the deal was done, there was a large head count reduction, which for a
technical company is the equivalent of a retailing dumping inventory and not
restocking it.

It was then merged with WinZip, WinDVD and a few other companies and then spun
back out as a new company under the Corel name again.

It turns out that this didn't work so well for Corel and Vector reacquired
them in 2009 to try this all again.

see: [http://247wallst.com/banking-finance/2009/10/29/corel-
strang...](http://247wallst.com/banking-finance/2009/10/29/corel-strangest-go-
private-ma-ipo-story-of-the-decade-crel-msft-adbe/)

~~~
rayiner
Companies with lots of cash on the books trade very cheaply because investors
think they'll burn through it without producing additional revenues.

~~~
trgn
Out of curiosity; what about apple, exxon and other of these juggernauts? Does
cash depress stock price here? Or do they come out on the other end of the
wormhole, where they have so much cash because they cannot conceivably put it
to work profitably in their domain/industry?

~~~
rayiner
I meant that companies that are trading very cheaply despite having a lot of
cash on the books do so because investors think they'll burn through it
without producing revenue.

~~~
trgn
cool thx

------
_kyran
This press release([http://dicksmithholdings.com.au/wp-
content/uploads/2016/01/P...](http://dicksmithholdings.com.au/wp-
content/uploads/2016/01/Press-Release-Ferrier-Hodgson-Dick-Smith-Holdings-
January-2016.pdf)) from today says it all:

Dick Smith Holdings Ltd, (‘DSH’) one of Australia’s largest electrical
retailers, was placed in receivership today following the appointment of
Voluntary Administrators.

Receiver Mr James Stewart said it was too early to clearly identify the
primary causes of the company’s current financial position and the reasons for
its decline other than saying the business had become cash constrained in
recent times.

------
osullivj
Who bought into the float? I'm guessing institutional investors, like pension
fund managers, bought many of the shares at $2.20. Serious questions should be
asked of those guys too. They have a duty of care over people's pension funds,
they're investment professionals, and they should be able to read the balance
sheets and not get outsmarted by this Phil Cage fellow.

~~~
caf
One of the comments to the article:

 _Who were the fund manager bunnies that fell for all this? Perpetual, AXA,
Commonwealth Bank and AMP. Well done guys! Now who can name the investment
managers responsible so as we can all give them a wide berth?_

~~~
adaml_623
And the reply to that comment: > You ask who “fell” for it? I’d be more
inclined to ask who was “In On It”

~~~
osullivj
"Goldman Sachs and Macquarie Capital were joint lead managers, joint
bookrunners and underwriters to the Offer. Aquasia advised the Board in
relation to the Offer and Minter Ellison was Dick Smith’s legal adviser." [1]

So, the usual suspects...

[1] [http://dicksmithholdings.com.au/events/dick-smith-lists-
on-a...](http://dicksmithholdings.com.au/events/dick-smith-lists-on-asx/)

~~~
paganel
> So, the usual suspects...

I'm reading an economic history of the pre-industrial age, and when talking
about the "la commenda" system
([https://en.wikipedia.org/wiki/Limited_partnership#Concept.27...](https://en.wikipedia.org/wiki/Limited_partnership#Concept.27s_roots))
from Medieval Italy, a concept which is one of the earliest forms of
capitalism, the author mentions that this system wouldn't have taken roots if
the parts involved hadn't had "a diffuse sense of honesty". Also, if one of
the parts involved in the commenda contract were to show dishonesty, "after
some time nobody would have given him their own savings to use as investments
anymore".

800 years since those times entities like GS are as dishonest as a private
entity can be, and still people and other companies choose to involve them in
their financial dealings. It's, to say the least, most curious.

~~~
dantillberg
While I'm not an expert on the subject, I imagine that one could counter that
today we have analysis tools and financial reporting that give potential
investors much more informational leverage than a purchaser might have had in
Italy in 1200, and that this information battle is the natural balance for
equity exchanges.

But regardless, the observation that parties involved must have a "diffuse
sense of honesty" in order for a system to function is definitely at play on,
for example, ebay, craigslist, private auto sales, yard sales, and the like --
systems where buyers have very little information about the product or
reputation of the seller, other than what the seller provides them, to decide
whether or not to enter into a transaction. There is a social expectation that
people should be honest, I think, and while we would not be surprised to hear
of people getting ripped off on craigslist or ebay, and while we encourage
others to take the possibility into consideration when making purchases, we
(or at least I) nonetheless place the bulk of the blame for fraud on the
malicious seller, not the hapless buyer.

~~~
josho
> we (or at least I) nonetheless place the bulk of the blame for fraud on the
> malicious seller, not the hapless buyer.

I agree, and find the tone of this thread interesting because it is very much
reversed. In that blame seems to be falling on the buyer for not knowing
better. Yet, it was the seller that seemed to manipulate the business to
inflate standard business metrics at the expense of sustainability. Further,
the investment banks then turned a blind eye to the state of the business and
facilitated the sale.

This reminds me of the sub-prime fiasco. Ie. we had a a system where everyone
optimized their own position, but overall those optimizations led to net
losses. Same seems to apply here--Private equity optimized their own position,
Fund managers likewise, yet the company itself is no longer viable. The long
term outcome of this is a failed economy unless systemic corrections are made
before that happens.

------
Negitivefrags
It's worth noting that Dick Smith is going into receivership now. This was an
article posted today in my local paper.
[http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&o...](http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11569422)

~~~
nzgrover
At the beginning of the month they ran an article basically saying this was
about to go down:
[http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&o...](http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11556861)

------
markdown
Why is this shit still legal?

I mean, for basic goods, there are laws against false advertising and selling
defective goods (lemon laws in the US).

But at this level, these bastards can put a fresh coat of paint on a rust
bucket and sell it as a Ferrari... and get away with it? Infuriating.

On a personal level... When I was growing up, it was goldmine of electronic
components, DIY kits, etc. I visited a Dick Smith a few years ago and it was
terribly disappointing... computers, televisions, phones. The DIY stuff that
was a makers dream was gone. I believe a parallel in the US is what happened
to RadioShack.

~~~
Sir_Substance
I worked at dickies during the last of the components era. I know that makers
like to fantasize about it, but the reality is it was gotten rid of because it
was a dog.

As a section it made basically no money, very few people were actually buying
components, maybe one in 50 customers. Most people came to the store for
batteries, chargers, step down converters, antennas etc, and I believe they
were the real loss when dickies moved into the TV era.

However, despite the lack of traffic, it was the highest maintainence section
of the store. It took three times the effort to maintain, because people would
pull out 5 different strips of resistors and three different strips of caps,
go back to their color chart and circuit diagram and figure out which two they
actually needed, and then shove the six other strips into a random drawer and
walk off, and it was the staff that had to go through 300 tiny drawers with a
resistor chart figuring out what went where. You'll notice jaycar keeps most
of that shit behind the counter.

~~~
mb_72
It's a small point, but actually Jaycar only keep semis, LEDs and similar
parts behind the counter. Resistors are on tape in groups of 8 with cardboard
or plastic envelopes, and capacitors are free floating. I believe Jaycar
selling all sorts of other rubbish helps them keep their component side going,
plus besides Aztronics they're generally the only bet for people off the
street to get parts these days.

I remember buying parts from DSE back up to when they moved out of this
market, and managed to score a bunch of stuff cheap. It's a sad day for the
company, although ironically the maker and DIY electronics scene seems
stronger today than ever. Too bad they never worked out a way of capitalising
on it.

------
snake_plissken
While I get the whole buyer beware thing, as it's supposed to be consummate
investment managers making the decisions, I can't shake the feeling that this
whole thing is shady. Anchorage Capital used a bunch of accounting maneuvers
to make the company look stronger than it was in actuality. It's even shadier
if you agree with the position that Woolworths wanted out and was willing to
take ~60% haircut on $300 million worth of inventory, because then it becomes
kind of obvious what Anchorage was going to do all along. I am not sure what
is more unsettling. That investment managers didn't realize they were buying a
retail company with no inventory and cash flows generated by the liquidation
of said inventory, or that a PE company sold what they knew was a stripped
down company to the public?

------
twelvechairs
Google cache as the site is down:
[http://webcache.googleusercontent.com/search?q=cache:6ejGUtu...](http://webcache.googleusercontent.com/search?q=cache:6ejGUtuY55oJ:https://foragerfunds.com/bristlemouth/dick-
smith-is-the-greatest-private-equity-heist-of-all-
time/+&cd=1&hl=en&ct=clnk&gl=us)

------
danieltillett
This story might be a little too Australian to appeal to the broad HN
community, but what happened to dick smith was completely criminal. Defiantly
worth a read.

~~~
neurotech1
Its worth noting that Dick Smith, the founder/adventurer/pilot, has zero to do
with how Dick Smith Holdings is ran as a company.

~~~
Namidairo
Dick Smith Foods however, I think he might still have a hand in.

One of their more memorable products, being the Dickheads...
[https://en.wikipedia.org/wiki/Dickheads](https://en.wikipedia.org/wiki/Dickheads)

~~~
caf
They never dared move into the cheese market, though.

~~~
nl
[http://www.dicksmithfoods.com.au/product-range/cream-
cheese-...](http://www.dicksmithfoods.com.au/product-range/cream-cheese-
spread)

~~~
caf
Pass the Dick Cheese, I stand corrected.

------
roel_v
Talking about Dick Smith, when I was in Oz a few weeks ago I stayed in an
Airbnb'd house that had 'Dick Smiths fun way into electronics' in a bookshelf.
Apart from some funny 1980's anachronisms ('Moore's law will be irrelevant by
the early 1990's because who needs that many transistors'), I loved it. I'm
trying to learn some basic electronics and the descriptions of the circuits
provide the right 'bridge' between 'this is Ohm's law' and 'here is a fully
functional schematic'.

So my question - is there a place I can get all 3 volumes? Or does anyone have
pdfs of them?

~~~
julianz
If you search on trademe.co.nz (biggest auction site in NZ) in the book
section there are several copies of all the books available cheap.

I was an 80's kid and the Fun Way books and associated kits were definitely
one of the ways I got into electronics and related tech stuff. It's a real
shame what's happened to Dick Smith but it's been easy to see it coming for a
very long time.

~~~
roel_v
Ah yes, I hadn't thought of that - thanks!

------
Vintila
Somewhat interesting: [http://www.anchoragecapital.com.au/case-study-dick-
smith](http://www.anchoragecapital.com.au/case-study-dick-smith) Their case
study on the acquisition.

~~~
SyneRyder
A few interesting points in there. Anchorage apparently sold off their entire
investment by September 2014, near their peak price, though the shares traded
around the same numbers for another year[1].

They describe Dick Smith Electronics as the largest retailer in Australia by
"number of stores" \- which should maybe have been a warning sign if they had
more stores but less revenue.

Anchorage also mention Dick Smith taking over operating the electronics
departments of David Jones department stores in October 2013 - but just six
months later, David Jones was sold to Woolworths South Africa and taken
private[2].

Also worth noting the "Hong Kong sourcing office for private label products".
Over-investment in private label products seems to have sunk them: few people
want a Dick Smith TV over a Samsung, Sony or LG.

[1]
[https://au.finance.yahoo.com/q/bc?s=DSH.AX&t=2y&l=on&z=l&q=l...](https://au.finance.yahoo.com/q/bc?s=DSH.AX&t=2y&l=on&z=l&q=l&c=)
[2] [http://www.news.com.au/finance/business/david-jones-
agrees-t...](http://www.news.com.au/finance/business/david-jones-agrees-to-be-
bought-by-south-africas-woolworths/story-fnkgdftz-1226878583679)

------
femto113
The half-billion dollar number seems overstated, that was a theoretical market
cap and doesn't imply that much money really changed hands. If I'm reading
this correctly Anchorage's actual takeaway was "only" about $100MM, since they
retained 20% after the float, they then sold this off in the market. For those
assuming Woolworths was duped I note they got a comparable amount. This
suggests they gave up roughly 50% of the extractable value in return for not
having to do any of the dirty work. The big losers are anyone who bought the
float at list price and still hold it, and of course the taxpayers who are on
the hook for "employee entitlements".

~~~
chillydawg
That 20% was what was left after they sold 80% to the market, though.

The article mentions the fund acquired 100% of the equity in Dick Smith from
woolies so at float time, Woolies had nothing to do with it. I think Woolies
got a pretty decent price and people buying shares at IPO need to do their
homework.

------
xcasex
This, to me, is somewhat funny in the "that train is going to hit that car.."
sense.

whenever there's an exploit used by non state actors in an adversarial sense,
there's goverment pressure to cyber this, cyber that, banhammer down, on the
technology sector.

But several times a year we get to read about predatory behaviour by financial
institutions. i'd even venture to say borderline illegal considering the
presedences. i digress, but there's simply low enough of a risk of the
goverment getting involved that this type of crime is not only "worth it" but
also shows how deeply embedded the finance sector is in the pockets of
politicians the world over.

~~~
arethuza
What was "borderline illegal" about it - from what I can see they used a few
tricks that are fairly standard in the private equity world and that any
"sophisticated" buyers of the stock should have been able to spot if they were
any good at their jobs.

Of course, the PE company comes across as sharks - but _all_ PE companies are
sharks - that's what they do!

~~~
yvdriess
You are being a bit hard on sharks here, they provide a valuable service to
the ecosystem.

~~~
kelvin0
Care to enlighten a neophyte about what the sharks bring to the financial
ecosystem in this case?

~~~
PeterisP
In general, elimination of uncompetitive companies is one of the important
tools that make the economy strong and prosperous.

If some system (company, branch, industry niche, product line - in different
scales) in the economy is weak and inefficient, then simply allowing it to
operate as-is will be a constant drain on the society, and artificially
supporting/subsidizing it will hurt the people/companies who are either doing
the same thing better, or doing some different, better thing.

On the other hand, ripping an inefficient company apart as the 'sharks' do -
that is a way to reallocate all those resources (subsidiaries, employees,
capital, buildings) to other places that will make a better use of them. The
whole reason why large companies exist is because it's a way to get 2+2=5, so
to speak. If some company achieves 2+2=3, then tearing it apart to get two 2's
out of it is a valuable service for the financial ecosystem.

Lack of such 'sharks' increases short-term stability, but at the cost of
having a lot of resources tied up in inefficient places; this is considered
one of major factors why planned/command economies tend to fall behind to
market economies - simply because they tend to leave uncompetitive businesses
alone instead of agressively dismantling them.

~~~
eru
And in this case, this whole fiasco might actually be partly to be blamed on
lack of more sharks: it was not and is not possible to short stocks of Dick
Smith.

------
cant_kant
"After a period of exclusivity, in November 2012 Anchorage acquired the
business for $20 million. "

"At the time of listing the business had a market capitalisation of $520
million. Anchorage retained a 20% stake in the listed entity following the
IPO, which was subsequently sold down in September 2014. "

Nice IRR.

------
puppetmaster3
Have you all seen the doc:
[http://thewallstreetconspiracy.com](http://thewallstreetconspiracy.com)

It's related to Google Voice and a startup that went IPO.

------
tsujamin
Good mate of mine works there. Been telling me dodgy shit for ages now. Both
had a good laugh today about it :P (except for the whole loosing his job
thing)

------
nraynaud
I can't stop thinking about Dick Smith getting into his helicopter, going back
to Alaska and kick some butts there.

------
lintiness
when i graduated from college, everybody wanted to be investment bankers
(glorified sales people for businesses). now, everybody wants to be a private
equity analyst. the market's replete with firms engineering paydays rather
than retooling businesses as investments (the old way), and the newb "desire"
to enter the market is definitely a symptom of disease.

------
beedogs
Hooray for private equity, the vultures of capitalism.

~~~
eru
Vultures funds are pretty important. Just as much as shorting.

------
anon4this1
[http://www.anchoragecapital.com.au/team/](http://www.anchoragecapital.com.au/team/)

Phil Cave was the anchorage capital guy who they made the chair of dick smith,
and who must've led this thing.

"Phil was appointed a Member of the Order of Australia in 2007 for services to
the community, particularly support services to children and young adults with
disabilities, and to business as a company director. He is currently Chairman
of the not-for-profit organisations Ability First Australia and Excelsia
College (Formerly Wesley Institute)."

this guy needs at minimum criminal charges, preferably a fucking bullet.

~~~
pjc50
Why criminal charges? He wasn't defrauding members of the public, all the
relevant information is in the balance sheets (as we can see in this blog!)
and the investors who lost out were big equity market players who _really_
should have known better.

The extraordinary thing is buying a business with $371m of inventory for
$115m.

~~~
caf
It sounds like there wasn't sufficient information provided at the time of the
public offering to do this analysis. The article author writes in the
comments:

 _We were talking about this yesterday. The problem is that they only have to
provide you with a balance sheet at one point in time. We knew it was fishy at
the time of the float but there was no way of working all of this out until
you can see a time series (and, importantly, they had to give you the old
balance sheet as part of the business combinations note). The $170m of
inventory in the prospectus was roughly two months sales, about the same as
JBH. Looks low but you wouldn’t think only half of what is usually required._

The pre-float article is here:
[https://foragerfunds.com/bristlemouth/bristlemouthdick-
smith...](https://foragerfunds.com/bristlemouth/bristlemouthdick-smith-takes-
bath-comes-out-nice-and-clean/)

~~~
eru
Buying into an IPO with insufficient information is still pretty stupid.

