Stab buys itself back

Stu Nettle
Swellnet Dispatch

 "You only get one Alan Bond in your lifetime, and I've had mine," was how Kerry Packer mockingly described his profitable encounter with Alan Bond.

In 1987, Packer sold Channel Nine to Bondy for just over a billion dollars, and then three years later bought it back for $250 million when the WA businessman began to stumble.

Two years ago Sam McIntosh and Tom Bird sold Stab to SurfStitch for an inflated price and today they bought it back far cheaper. It's tempting to make the analogy to Packer though it's not entirely accurate.

In May 2015 SurfStitch bought Stab in a deal worth $2.26 million in cash and 2.4 million shares. The sale was just one acquisition of a bold digital media strategy - SurfStitch also bought Magic Seaweed, Garage Entertainment, and FCS. However, not long after the purchase the wheels came off and SurfStitch crashed spectacularly.

With such a dramatic fall it was only a matter of time before the recriminations began. At present SurfStitch are facing two class actions, plus five court cases relating to the failed strategy, and three weeks ago they called in voluntary administration to clean up the mess and restructure the company. All the assets were put on the table as SurfStitch fielded offers to raise cash.

And this, of course, is where Sam and Tom stroll in to buy back their own company for a song - or a "nominal cash consideration" as the press release states. Packer meet Bond, sort of...

You see, though they got $2.26 million in cash, the larger chunk of the Stab deal was stock of 2.4 million shares. At the time of the sale the shares were worth $1.50 - valuing them at $3.6 million - and at their peak they hit $2.13 - putting a cash value of $5.1 million on Stab's shares!

However, they were held in escrow, unable to be cashed out, and before they could SurfStitch's stock plumetted. First from the $2.13 peak down to around $0.20, where they foundered for a year before sliding further still. It's currently $0.06 which values Stab's shares at just $144,000.

So today's sale isn't quite as sweet as Kerry Packer's all those years ago. Nevertheless the duo have come out ahead, and perhaps more importantly they've regained ownership of their title they started back in 2004 (along with Derek Rielly who left before the SurfStitch acquisition).

Economists are trotting out doomsday prophecies for SurfStitch, but whatever happens it'll have no longer have any bearing on Stab.

Comments

Nick Bone's picture
Nick Bone's picture
Nick Bone commented Monday, 11 Sep 2017 at 12:21pm

2.2 mil in cash? What does mean exactly? If average joe did a cashie on the weekend, its more or less money that doesnt get declared for tax purposes which is illegal i think? Why is the need to be paid in cash?

gcuts's picture
gcuts's picture
gcuts commented Tuesday, 12 Sep 2017 at 8:19am

Different context Nick. "Cash" in the 'Corporate World' means it is "paid for" rather than say a "cash and script" deal, which means cash and shares (and not cold hard earned and a prescription for prozac).

When Stab sold to Surfstitch the deal was cash and script (shares).

The buy-back is now just cash. So, they are handing of $$$.

thermalben's picture
thermalben's picture
thermalben commented Monday, 11 Sep 2017 at 12:32pm

Cash is a term to describe one of many financial instruments (currency, shares or bonds) used in a monetary contract. Nothing to do with tax. 

Blowin's picture
Blowin's picture
Blowin commented Monday, 11 Sep 2017 at 12:40pm

Stoked.

surfads's picture
surfads's picture
surfads commented Monday, 11 Sep 2017 at 1:39pm

And Coastalwatch?

nicko74's picture
nicko74's picture
nicko74 commented Tuesday, 12 Sep 2017 at 1:31am

Hmmm, print media apparently is a thing of the past, to say they bought it for a steel would suggest otherwise?

stunet's picture
stunet's picture
stunet commented Tuesday, 12 Sep 2017 at 8:13am

Most of their focus has gone toward online, their website. Been that way for a few years now.

stunet's picture
stunet's picture
stunet commented Tuesday, 12 Sep 2017 at 8:16am

Interesting comments from Sam McIntosh on Stab RE buyback and how they're gonna remove comments from the site.

Makes sense for them 'cos the stories are celebrity-focussed. Celebs and anonymity don't play well.

Blowin's picture
Blowin's picture
Blowin commented Tuesday, 12 Sep 2017 at 8:53am

How do you reckon that approach will work for them ?

They'd better lift their game exponentially if they want to get views on content alone .

Having said that....I'd stare at a wheetbix box if there was a picture of a wave on it . Maybe a lot of people the same and it'll still garner attention.

stunet's picture
stunet's picture
stunet commented Tuesday, 12 Sep 2017 at 9:10am

Could be all right for them. Sounds like their direction ain't gonna change so they'll be pushing lots of advertorial between the editorial and that often requires 'authentic' voices - i.e the people paid to peddle the stuff.

There's a reluctance for celebs to appear in places they can't control which is why they'll have their own IG account and that's the extent of their online forays.

From their POV, why would they give their time to a journo if they're only gonna be torn to shreds in the comments? If Stab becomes a safe space then expect more celeb pieces.

Why it differs for Swellnet: we have a diff demographic who generally care less about the power of celebrity and are a bit more restrained when they appear on the site (save for the odd fuckwit who can't help themself).

fong's picture
fong's picture
fong commented Tuesday, 12 Sep 2017 at 8:44am

Interesting all the noise over a couple of million yet nothing is said when billabong loses best part of 800 million this year?

thermalben's picture
thermalben's picture
thermalben commented Tuesday, 12 Sep 2017 at 10:59am

The $860 million loss was in 2013 (which followed a $300 million loss in 2012). Billabong lost $77 million in the past financial year, compared to the $23 million loss in 2015.

We've covered Billabong across at least half a dozen articles since things turned sour.  

stunet's picture
stunet's picture
stunet commented Tuesday, 12 Sep 2017 at 8:59am

Yeah fuck, as if between those two, Bong and SS, the allegorical warnings aren't flashing bright enough.

Surf and big biz don't match.

It's done.

It should have been apparent when Big 3 execs admitted all those years ago that more than half their sales went to non-surfers. Ain't hard to predict the ending once those fashion wheels turn.

The future of surf is stripped-down, dynamic companies servicing a smaller market.

But growth being what it is they'll struggle to resist the next online expansion opportunity thrown their way.

Clam's picture
Clam's picture
Clam commented Tuesday, 12 Sep 2017 at 9:23am

"Interesting comments from Sam McIntosh on Stab RE buyback and how they're gonna remove comments from the site."

Where will the infamous commenters go instead ?

freeride76's picture
freeride76's picture
freeride76 commented Tuesday, 12 Sep 2017 at 10:01am

they'll find a home.

stunet's picture
stunet's picture
stunet commented Tuesday, 12 Sep 2017 at 10:31am

I imagine some (most?) will emigrate to BG so it'd be a win/win.

talkingturkey's picture
talkingturkey's picture
talkingturkey commented Tuesday, 12 Sep 2017 at 11:48am

Rielly will have his revenge!

stunet's picture
stunet's picture
stunet commented Tuesday, 12 Sep 2017 at 12:04pm

I'll be watching closely, but I really can't see this hurting Stab in any way. More than any other site/publication they're coupled up with the industry doing collabs, partnerships, whatever you want to call them, and the industry dosn't like the open warfare zone of comment sections.

So Stab lose the comments and attract more collab and partnerships - ergo more bucks to their bottom line.

The other thing worth considering is that comments form a very small % of readership, a fact that some commenters can't quite come to terms with.

The number of people who comment, or who return to read comments, is a tiny proportion of overall readership on Swellnet. I imagine the pattern would be the same elsewhere, though not at BG who are running a different model - call it a regularly refreshed forum board, they rely on commentary. Hence win/win.

Gary G's picture
Gary G's picture
Gary G commented Tuesday, 12 Sep 2017 at 1:26pm

"The other thing worth considering is that comments form a very small % of readership"

Undoubtedly, Stunet, but Gary wants to make sure that you're choosing the right metrics to make decisions.

Whilst Gary is not in possession of the full statistics, he would think that he represents at least 2/3 of the Swellnet readers' muscle mass and 3/4 of their good looks on any forum he participates in.

It should come as no surprise to learn that Gary is a particularly well-endowed contributor

When I get that feelin',
I need: Ga-ry-G healin'
Ga-ry-G,
healin baaaaby; it's good for us.
When I need chin-ups

stunet's picture
stunet's picture
stunet commented Tuesday, 12 Sep 2017 at 2:15pm

Struggling to find those metrics in Google Analytics, Gary.

I must have the old version.

Gary G's picture
Gary G's picture
Gary G commented Tuesday, 12 Sep 2017 at 8:22pm

You won't find Gary slumming it in your Google Analytics, Stunet.

Gary's mode of operation is more like a Cookie.

When I get that feelin',
I need: Ga-ry-G healin'
Ga-ry-G,
healin baaaaby; it's good for us.
When I need chin-ups

Gaz1799's picture
Gaz1799's picture
Gaz1799 commented Tuesday, 12 Sep 2017 at 12:48pm

The demise of Surf Stitch comes as a surprise to absolutely no one as it reflects the general situation of retail and surfwear in general. They priced themselves out of the market. There used to be almost zero discounting on surfwear or surf accessories then they slowly started bringing it in and surfstitch were the worst of the lot. All of a sudden everyone's buying a new steamer at the start of summer or boardies just before winter purely to save $$$ and get 30% off. Brands that make their own gear ie Hurley, Billabong somehow survive but middlemen like SS get hammered by the RRP set by them. I was getting discount codes in my inbox every week at one stage it was the only way they could get customers once they went mad with it. I saw 6 months back they were selling Adidas, Nike etc so they're not even focused on the surf industry anymore, only generating cashola. Like a car dealership that branches out into boats/caravans before slowly dying SS is cactus.

Stab did well to salvage their brand I wonder what they'll flog FCS and MSW for.

memlasurf's picture
memlasurf's picture
memlasurf commented Tuesday, 12 Sep 2017 at 2:38pm

Could care less if Stab sunk with Surf Stich. It is rubbish.

Herc's picture
Herc's picture
Herc commented Tuesday, 12 Sep 2017 at 3:04pm
stunet's picture
stunet's picture
stunet commented Tuesday, 12 Sep 2017 at 3:11pm

Long as Jed keeps getting his articles over the line I'll keep tuning in.

derra83's picture
derra83's picture
derra83 commented Friday, 15 Sep 2017 at 11:00am

I havent read much of his stuff but I didn't like that article. I'm on side politically, agree with the sentiments (and live locally) but disagree with the manner used to express the argumnent. For mine, it seems Jed simply wants to shock and that should be enough to change the world. It's a 1970s Laborite worldview and utterly ineffective, appealing to the people who simply like the fight and not the negotiation. In other words, gratuitous.

freeride76's picture
freeride76's picture
freeride76 commented Tuesday, 12 Sep 2017 at 3:12pm

Yeah, he's by far their best writer/journo.

Shatner'sBassoon's picture
Shatner'sBassoon's picture
Shatner'sBassoon commented Tuesday, 12 Sep 2017 at 3:23pm

Re: Herc's article link...Jeez, I wonder why they're going to be kiboshing the comments. Mods be working over-time?

indo-dreaming's picture
indo-dreaming's picture
indo-dreaming commented Tuesday, 12 Sep 2017 at 3:56pm

Im surprised Stab is worth anything it was the worst surf mag just full of filler and no substance and their website and articles are nothing special and tend mostly to be quite trashy, their comment sections are even worse.

"friendly passive aggressive wolves in sheeps clothing. ;)"

stunet's picture
stunet's picture
stunet commented Tuesday, 12 Sep 2017 at 4:05pm

ID,

I think at this point you have to consider how close, or otherwise, you are to surfing's target demographic.

Blowin's picture
Blowin's picture
Blowin commented Tuesday, 12 Sep 2017 at 4:17pm

Honestly Stu , do you think that groms are the demographic these days ?

Aside from the statistics of surfing participants , look at the Swellnet , Beachgrit , Stab audiences ....

stunet's picture
stunet's picture
stunet commented Tuesday, 12 Sep 2017 at 4:23pm

No, but they're the ones that buy stuff, so I guess I should've qualified that part. Commercial demographic or something...

Next time you're in the newsagents check the number of ads in Stab to other rags. Good gauge for how they're positioned.

memlasurf's picture
memlasurf's picture
memlasurf commented Tuesday, 12 Sep 2017 at 4:30pm

Stu who does Chas Smith belong to as I read his book about Hawaii which was fun, however, I know nothing about him other than he has little fear and pisses a lot of people off - and he surfs. I thought he had a gig on one of the sites. He would be a good fit for Stab.

stunet's picture
stunet's picture
stunet commented Tuesday, 12 Sep 2017 at 4:33pm

And he was, 'cept he left Stab when Derek Rielly did and the two started up Beach Grit a few years back.

Lanky Dean's picture
Lanky Dean's picture
Lanky Dean commented Tuesday, 12 Sep 2017 at 4:37pm

"You see, though they got $2.26 million in cash, the larger chunk of the Stab deal was stock of 2.4 million shares. At the time of the sale the shares were worth $1.50 - valuing them at $3.6 million - and at their peak they hit $2.13 - putting a cash value of $5.1 million on Stab's shares!

However, they were held in escrow, unable to be cashed out, and before they could SurfStitch's stock plumetted. First from the $2.13 peak down to around $0.20, where they foundered for a year before sliding further still. It's currently $0.06 which values Stab's shares at just $144,000. "

Seems to me that they might have been cheated from the get go.
At the peak they have lost 5.1 Million . Plus the buy back let's say X( 1.2 ?) it's just a guess.

so cash = 2.26
Shares = 5.1

Total = 7.36

Minus X (1.2), Minus Shares 5.1,

total credits = 1.06 ( not including debts , operating costs , payroll , overheads).

I have a hard time understanding how they have not been ripped off.

Gaz1799's picture
Gaz1799's picture
Gaz1799 commented Tuesday, 12 Sep 2017 at 4:48pm

I'm with you there but I guess that's the general consensus of the other SS shareholders too.

stunet's picture
stunet's picture
stunet commented Tuesday, 12 Sep 2017 at 4:50pm

Fuck...I'm operating through a Codral haze here, LD. None of that makes sense to me.

You gotta think, well hey, they weren't forced to buy it back so if they were ripped off, how bad could it be?

Gaz1799's picture
Gaz1799's picture
Gaz1799 commented Tuesday, 12 Sep 2017 at 4:55pm

Basically theyd have about a million bucks left by the time they sold the company, share price went down and then bought it back again. That's having a guess at what they bought it back for.

Still pretty good money but shit considering the share value wipeout.

Simon Hayward's picture
Simon Hayward's picture
Simon Hayward commented Tuesday, 12 Sep 2017 at 6:16pm

"The other thing worth considering is that comments form a very small % of readership, a fact that some commenters can't quite come to terms with."

ha ha ha

harryc's picture
harryc's picture
harryc commented Tuesday, 12 Sep 2017 at 6:22pm

Hope they've grown up enough to get rid of the 'girls' section of the website. Or perhaps it could be replaced with some girls actually surfing - might save them on some dev costs.

stunet's picture
stunet's picture
stunet commented Tuesday, 12 Sep 2017 at 6:36pm

Well here's an about face: Stab are keeping their comments now! Though they've made an earnest appeal to decency...

"So we won’t throw the baby out with the bathwater. Yet. Instead, we’ll bring the heat and hope for the best. In fact, we’ll see your Disqus, and we’ll raise you. If half the reason so many of you are here is to play in the mud with the animals, we might as well hop in and have some fun with you. While it’s not a writer’s most romantic work, if we have to set ourselves to the task of flagging homophobic, regressive, racist comments to encourage a radical, free exchange of ideas, then let us take up the task proudly.

From now on, our writers will be tasked with moderating and contributing to the threads that get pulled out of their posts each day, and our youngest, hungriest recruit, Michael Ciaramella will be making sure you jackals are only fed prime cuts. (Guy loves talking shit, don’t he? To his credit, he ain’t afraid to back it up, in and out of the water.)  

Moving forward and giving this a go, we’ll be incentivizing our loyal commenters and bringing on new moderators. Interested? We’ll be putting together regular packages for moderators helping keep the conversations moving forward, and holding reader-submitted competitions for all of you to sink your teeth into.

With last week’s repossession, and my arrival as Editor in Chief, it’s a blank slate here at Stab. While we continue to push Stab’s tradition of featuring the "best surfing, biggest names, and bigger thinking," I’ll be bringing an outsider’s perspective, higher quality journalism and editorial, and a true believer’s bullshit meter. And I’ll be pushing to keep the underground brightly lit.

What I won’t be doing is operating as a faceless dictator, too insecure to let the fourth wall down and speak to readers directly. But right now, I need to check and see if my childhood home is still standing.

So, keep it cutty with a little class, Stab. I’ll see you in the trenches, but I’m looking forward to meeting you all on high ground.

Sincerely,

Ashton Goggans, Editor in Chief"

Shatner'sBassoon's picture
Shatner'sBassoon's picture
Shatner'sBassoon commented Tuesday, 12 Sep 2017 at 6:55pm

"Moving forward and giving this a go, we’ll be incentivizing our loyal commenters and bringing on new moderators. Interested? We’ll be putting together regular packages for moderators helping keep the conversations moving forward, and holding reader-submitted competitions for all of you to sink your teeth into."

Oh sweet baby cheeses, don't be getting ideas, Stu-bags!

stunet's picture
stunet's picture
stunet commented Tuesday, 12 Sep 2017 at 6:58pm

Play nice and I'll send you a sticker pack Shatner.

How's those incentivizerers?

Blowin's picture
Blowin's picture
Blowin commented Tuesday, 12 Sep 2017 at 6:59pm

What's " keep it cutty " mean do you think ?

Keep it catty , maybe ? As in bitchy ?

Is that a Seppo term that they've abbreviated for the Aussie readers ?

Hands up anyone that's ever commented on STAB .

That's a negative for me.

Blowin's picture
Blowin's picture
Blowin commented Tuesday, 12 Sep 2017 at 7:03pm

I'll moderate the wrinkled scrotum out of this fucking forum if you want.

stunet's picture
stunet's picture
stunet commented Tuesday, 12 Sep 2017 at 7:03pm

It's a roundhouse way of saying, keep your comments on track, stay near the source, don't go off on wild digressions, and always finish with a bounce.

I'm sure Pottz could explain it better.

Blowin's picture
Blowin's picture
Blowin commented Tuesday, 12 Sep 2017 at 7:15pm

You ever snuck a comment in at STAB ?

Potts was my favourite surfer for quite a time. In budding Blowin fashion I'd sit there with my mates and argue his strengths versus their chosen ripper with all kinds of faux - and genuine - passion , depending on the opponent.

Like a grommets version of trump cards.

That's the first time in my life that I've ever described myself in the third person. I'm very sorry for that.

stunet's picture
stunet's picture
stunet commented Tuesday, 12 Sep 2017 at 7:29pm

Umm nah....not on Stab. Few posts on BG is about it, and a few on Realsurf back in the day. I don't really FB or IG or Twitter either. 'Cept for on here I'm a social media hermit - too much noise out there as it is.

Pottz circa Strange Desires was a hairy uber-mensch

Blowin's picture
Blowin's picture
Blowin commented Tuesday, 12 Sep 2017 at 7:44pm

I've been looking at some share market forums lately . Not commenting , just observing .

Lurking , Ben called it .

You don't realise how much machismo and flair is possessed by even the most lacklustre surf monger till you've walked amongst those nerds.

Thank fuck for surfing.

Gary G's picture
Gary G's picture
Gary G commented Tuesday, 12 Sep 2017 at 8:17pm

Gary can really relate to you on the whole lurking thing, Blowin

When I get that feelin',
I need: Ga-ry-G healin'
Ga-ry-G,
healin baaaaby; it's good for us.
When I need chin-ups

freeride76's picture
freeride76's picture
freeride76 commented Tuesday, 12 Sep 2017 at 8:22pm

Only a few Stu?...........

Anyhow, I'm not surprised Ash has done an about face.

More than any other site/publication STAB is synonymous with it's comments........

And it's a risk to the brand to drop a giant shitt on the thing that made you edgy and "cool" even if the people on the other side of the velvet rope hated the hoi polloi shouting rude words at them.

It seemed pretty obvious that STAB was giving BG (main competition?) a huge free kick in readership by banning comments.
Looks like cooler heads prevailed.

Gary G's picture
Gary G's picture
Gary G commented Tuesday, 12 Sep 2017 at 8:24pm

Gary can really relate to you on the whole 'Describing yourself in the third person' thing, Blowin.

When I get that feelin',
I need: Ga-ry-G healin'
Ga-ry-G,
healin baaaaby; it's good for us.
When I need chin-ups

Blowin's picture
Blowin's picture
Blowin commented Tuesday, 12 Sep 2017 at 8:45pm

Id like to imagine a bit of the Gary G magic has rubbed off on me , but alas it wasn't proper third person.

Only Gary G is the real deal.

I was going to say he was the complete package , but I thought it might be a little bit close to the bone . Especially taking into account his avatar.

Gary G's picture
Gary G's picture
Gary G commented Wednesday, 13 Sep 2017 at 9:21am

Gary understands, Blowin. And thank you for the kind words.

Gary doesn't so much rub off on you (he's a bit classier than that), but there's a little bit of Gary in all of us.

When I get that feelin',
I need: Ga-ry-G healin'
Ga-ry-G,
healin baaaaby; it's good for us.
When I need chin-ups

Larry Lee's picture
Larry Lee's picture
Larry Lee commented Wednesday, 13 Sep 2017 at 10:43am

Okay Gary .
Back in your box / package whatever you call them shorts .

On the Stab comments omissions , I think this may have been a strategic move so they could write that Elliston article without fewer of some " old school " comments embarrassing Aust. In the world stage of open internet .
Or maybe , just maybe they had a HUGE about face at a really strategic time ...
Insert satirical ems statement here .
My sister Sara , always loved the light fluffy stuff in the feminine section of Stab . Apart from the fact that she isn't into the penetrative journalism that frequents this site as much .

Gary, now I know I was wrong
I messed up and now you're gone
Gary, I'm sorry I neglected you
Oh, I never expected you to run away
And leave me feeling this empty
Please come home 'cause I miss you, Gary
Gary, come home
Gary, come home

Herc's picture
Herc's picture
Herc commented Wednesday, 20 Sep 2017 at 11:52am