Truett-Hurst Inc (NASDAQ: THST) is having an incredibly strong start to the trading session this morning, and for good reason. The company announced an asset sale and management change that excited investors and sent the stock on a drastic run for the top. Today, we’ll talk about:
- The asset sale and management change;
- what we’re seeing from the stock; and
- what we’ll be watching for with regard to THST ahead.
THST Announces Asset Sale And Management Change
As mentioned above, Truett-Hurst is having an incredibly strong start to the trading session in the pre-market hours this morning after news broke of an asset sale. In a press release issued early this morning, the company announced that it will sell its wholesale wine business. This business consists of the company’s bottled wine inventory, brands, supplies and bulk wine inventory used for the company’s “control label” wine brands and related intellectual property.
Under the terms of the agreement, THST will sell the assets for about $18 million in cash. Also, the company said that it will receive ongoing royalty payments relating to certain of the acquired wholesale wine brands. After taxes and transaction related expenses and fees, the company said that it expects to bring in net proceeds of $15.9 million.
In the release, THST said that the sale of the wholesale wine business will allow it to focus its resources on its principal core brands. These brands include Truett Hurst and VML, which are generally sold at the Truett Hurst Winery, to wine club members via direct shipments, and to retailers around the country.
Also, the company announced that Paul Dolan will serve as the interim CEO, effective November 1, 2018. In the release, THST said that Phillip Hurst, current CEO, has accepted the position of Chief Innovation Officer with Precept Brands. Nonetheless, Mr. Hurst will remain as a member of the Board of Directors of the company. In a statement, Mr. Dolan had the following to offer:
I am very excited to jump back into the management of the Truett-Hurst Family Winery. Over the last 10 years our hospitality team has done an amazing job building relationships with the community and our club members and we are looking forward to expanding and enhancing our great service. As a winegrower I have a particular warm spot in my heart for vines that have unique flavors, power and finesse and together with our phenomenal winemakers Ginny Lambrix of VML and Ross Reedy of Truett Hurst we can’t wait to dive into the 2018 harvest.
What We’re Seeing From The Stock
One of the first lessons that we learn when we start to dig into the market is that the news leads to moves. In the case of Truett-Hurst, the news proved to be overwhelmingly positive. After all, the asset sale will drive a large chunk of funding into the company and will give the company a more defined focus on core products. So, it comes as no surprise that excited investors are sending the stock on a run for the top. Of course, our partners at Trade Ideas were the first to alert us to the gains. Currently (8:59), THST is trading at $3.00 per share after a gain of $1.60 per share or 114.29% thus far today.
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What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on THST. In particular, we’re intereted in following the asset sale transaction through to closing and what the company does to improve its core brand following the closing of the deal. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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