ITEX

[Parsad]

In the past, I've restricted discussion on the board regarding ITEX, as we were trying to work with management on implementing some ideas.  

 

For two years, they've been hesitant to enter any discussions with us, and we've attempted to get management to institute some initiatives (share buybacks, dividends, cash compensation for executives, customer exit surveys) via the ITEX Annual General Meetings.  They subsequently implemented those initiatives!  It's been a very slow process but we felt we wanted to give them every opportunity to work with us.

 

Alas things don't always work well that way, and now we are examining all of our options, as we believe the core franchise network needs to be invigorated:

 

We filed our proxy-related materials today:

 

http://www.sec.gov/Archives/edgar/data/860518/000138515210000018/dfan14a-1_09082010.htm

 

As well as our press release:

 

http://finance.yahoo.com/news/The-Committee-to-Enhance-ITEX-prnews-4181852644.html?x=0&.v=1

 

And you are welcome to visit our website for further information:

 

www.enhanceitex.com

 

I will not participate in any discussions on this board regarding ITEX, but members are now free to discuss ITEX as our intentions are completely public.  Cheers!

[Ballinvarosig Investors]

Hey Parsad, I have a question about the Polonitza group, not ITEX per se, so maybe you can answer it for me.

 

I'm curious, did you guys know each other before you got together for ITEX? I'm just curious because it's not often that you see such a disparate group of people get together for an investment. Also, do you see such a thing becoming more common place? It's certainly something I have an interest in because there have been times I have been able to own 1-2% of a company, which is a big chunk for me, but not quite big enough to influence a board.

[Parsad]

Hi Ballin,

 

Obviously Alnesh is my investment partner at CMC and the MPIC Funds.  He also happens to be my cousin...so I've known him for all my life.

 

I met Dave at the 2008 AGM, but we had spoken once before on the phone.  I met Rahul through Dave last year.  A disparate group perhaps, but we work very well together and both Dave & Rahul are very humble guys. 

 

Yes, I think this will become much more common place.  With the new reform bill on proxies, you will see this happen quite a bit with larger companies.  Small companies below $75M will have a 3-year exemption from the new rules, but after that you will see this happening with them as well. 

 

It will keep management on their toes...or they will have to own alot of stock and have a deep, vested interest in the company and its future.  This is our first such attempt, but it will be far from our last.  Cheers! 

[Zorrofan]

Sanj,

 

Sounds like an exciting venture and I wish you success. (I still think you should have ran for the board of SNS! :'( )

 

Cheers

Zorro

[manualofideas]

Underperforming companies and worried management teams may soon start buying the domain name enhance[company].com  ;D

[Parsad]

Underperforming companies and worried management teams may soon start buying the domain name enhance[company].com  ;D

 

Why remake the wheel?  I run a partnership, identical to another partnership (Pabrai), based on another partnership (Buffett).  It's worked ok for all of us!  ;D  Cheers!

[Guest]

Sanj,

 

Sounds like an exciting venture and I wish you success. (I still think you should have ran for the board of SNS! :'( )

 

Cheers

Zorro

 

that would've been amazing...maybe he could do it for BH :)

[Ballinvarosig Investors]

I see that the ITEX Board have submitted their proxy statement. It's disappointing that this has come down to a proxy battle. I would still like to see Steve White coming to an agreement with Polonitza/Pagidipati, but I guess it's too late for that now. Are there many ITEX holders here, I'm assuming that you're all supporting Polonitza/Pagidipati? Will Biglari support Polonitza/Pagidipati? I would say his stake will be key in which way the vote will swing.

[tnp20]

Sanj

 

I wish you best of luck. I did a similar proxy challenge to get directors on board several years ago with an investor friend I met online. We did it mostly ourselves and the total cost was $10,000. We did not succeed, we failed by 0.05 votes...it was close but there were several important lessons learned.

 

 

Couple of things to watch out for to ensure your success:-

 

(i) After filing our proxy, we called all the large owners of the stock to solicit support for the proxy and to get a vote count. Most were supportive, however susequent to the final vote we found out that we came up short more than we thought. Several funds that supported us claimed they owned X number of shares only to find out later that their backoffice had lent the shares out so their holding was immaterial from a vote count perspective. Make sure the shares you are counting on to be voted in your favour have not be lent out.

 

(ii) Broker votes are a killer. Broker non-votes might mean you might not even get to a quorum. Need  to determine how the broker votes will be counted.

 

(iii) Company may send out confusing communications to deliberately confuse shareholders as to which proxy card to vote.

 

 

[Parsad]

Hi Folks,

 

As we are now in the proxy solicitation stage, I will be locking this topic until the end of ITEX's AGM, so as to prevent any misinformation about ITEX, the existing management or The Polonitza Group.  Thanks very much!  Cheers!