# AIMIA (AIM)



## john.cray (Dec 7, 2016)

Hello investors,

After the recent events and dividend cuts Aimia seems to have bounced off the 1.40ish bottom and now trades at 1.88 per shares. Some articles suggest that the stock is oversold and undervalued. Are there any value investors around here who agree with this? Do you find now to be a good entry point with potential for recovery?

Regards,
JC


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## kcowan (Jul 1, 2010)

When a rewards program provider loses its main contributor and source of rewards, it has to adopt an alternative strategy. Are you comfortable with their strategy? They have also concelled their dividend to conserve cash.


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## OnlyMyOpinion (Sep 1, 2013)

What kind of a business is a 'data driven marketing and loyalty analytics program' anyway?
No, not a chance.


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## milhouse (Nov 16, 2016)

I was hoping to picking up some shares of AIM at around $1.40 hoping it'd stay at that level to indicate a bottom but they moderately rebounded fairly quickly. Currently, it's purely a speculative buy IMO. AC isn't gone yet but the challenge is whether they come up with a new main airline partner or clarification on their Aeroplan program down the road. They've got to do that soon or risk having their user base erode for Aeroplan. They do run other loyalty programs but the scale isn't close to their Aeroplan business. I think they can turn it around hence why I'm looking to buy in but only at a really cheap entry point. 

Just a point of clarification around the dividend. I don't think they cancelled their dividend but rather suspended it. It sounds like financially, they're able to pay the dividend but due to technical rules they aren't allowed to. They've made grumbling about still trying to pay the shareholders of record the dividend but who knows. 

It'd be funny if AC bought AIM.


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## milhouse (Nov 16, 2016)

Shares jumped on news Air Canada, in conjunction with TD, CIBC, and Visa, is making a hostile bid for Aeroplan.


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## nobleea (Oct 11, 2013)

milhouse said:


> Shares jumped on news Air Canada, in conjunction with TD, CIBC, and Visa, is making a hostile bid for Aeroplan.


Doesn't this seem a bit slimy? Almost manipulative?

You say you're cutting ties with the company. Predictably the price drops, substantially.
Then a month later you try to buy the company whole, at a discount?


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## milhouse (Nov 16, 2016)

nobleea said:


> Doesn't this seem a bit slimy? Almost manipulative?
> 
> You say you're cutting ties with the company. Predictably the price drops, substantially.
> Then a month later you try to buy the company whole, at a discount?


Yes and no. Yes for the obvious reasons. 
No because AIM was in some ways horribly run and their old leadership basically put them in this vulnerable position. 

When the shares dropped to $1.50, I remarked to the missus what's the point of AC starting their own loyalty program when they can likely buy AIM on the cheap now.


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## doctrine (Sep 30, 2011)

Note that they're proposing to buy Aeroplan, not Aimia, the parent publicly traded company. Aimia has a pile of liabilities and some other smaller businesses. 

This is very smart for Air Canada, and Aimia put themselves in this position. Just because you got a 20 year sweetheart deal doesn't mean you automatically get to renew. The business had two decades to stand on its own and failed.


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## noobs (Sep 27, 2015)

$4.21 today haha sweet


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## doctrine (Sep 30, 2011)

There are some big variants in what Aimia is worth after they sell Aeroplan for $450M. Very likely, the longer they operate, the less it is worth. It's hard to see much more than $5 a share at this point if they wound up shop by the end of the year.


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## fireseeker (Jul 24, 2017)

milhouse said:


> It'd be funny if AC bought AIM.


Milhouse: Props for your visionary insight!


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