Description

Company Description

CIBL Inc is one of Mario Gabelli's public entities that was spawned by his original control vehicle, Lynch Interactive. Founded in 1985, the 35+ year cagr, assuming one held all of the spun companies is nearly 17%-a number that is kind of eye-opening given the under-the-radar nature of most of the companies contrasted with a founder/allocator who is anything other than under-the-radar. We previously posted LICT back in 2015 and continue to hold every share despite the 400% appreciation in the share price in the ensuing six years. CIBL is more or less a cash shell with a tiny telecom business attached and, unlike most shells, has an active repurchase plan that has seen them reduce the outstanding shares by 48% since the company was spun off from Lynch in 2017. Interestingly, they have reduced the sharecount by 10% since the September 2021 quarter end.

Overview

As value investors we are suckers for buying cheap optionality. While that might be a hackneyed concept, Mario is endlessly creative, obsessively watches every egg in his basket, and is a deal junkie. Thus far he has used the cash pile to repurchase shares when they trade below the per share value of the company's assets listed in the following section. However, it is certainly not outside the realm of possibility that he could pull off a deal. As recently as 2015 he filed a registration statement for a CIBL spac. The press release read:

RENO, Nev., Oct. 27, 2015 /PRNewswire/ -- CIBL, Inc. ("CIBL" or the "Company") announced today that PMV Acquisition Corp. ("PMV"), an indirect, majority-owned subsidiary of CIBL, has filed a registration statement on Form S-1 with the U.S. Securities and Exchange Commission relating to a proposed initial public offering of its units.  PMV expects to offer ten million units, with each unit consisting of one share of common stock and one warrant to acquire one-half of one share of common stock, at an offering price of U.S. $10.00 per unit. The underwriters will also be granted an over-allotment option to purchase up to an additional one million five hundred thousand units to cover over-allotments, if any.

PMV is a blank check company formed for the purpose of entering into a merger, share exchange, asset acquisition, stock purchase, recapitalization, reorganization or other similar business combination ("Initial Business Combination") with one ormore businesses or entities ("Target Business"). The Company's efforts to identify a Target Business will not be limited to a particular industry or geographic region, although it intends to focus efforts on seeking an Initial Business Combination with a company or companies operating in the global telecommunications, media, entertainment, technology, industrial or consumer markets.  It intends to seek to acquire a Target Business with an aggregate enterprise value of approximately $250 million to $500 million.

While the exercise didn't result in a consummated transaction, it does speak to Mario's hunger for deal making and for the size of his appetite; case in point, another of his entities,  LGL Group (LGL),  launched a spac in 2021 and acquired IronNet Inc (IRNT)-creating value for LGL holders. 

Company's Assets

Cash and United States Treasury investments of $26.1 million and an investment merger limited partnership of $1.7 million, or $1,837 per share. As of September 30, 2021, CIBL had 15,169 common shares outstanding. • Ownership of Bretton Woods Telephone Company and World Surfer, Inc. providers of broadband and communication services in Northern New Hampshire. • 10,000 shares in Solix, Inc., a private outsourcing firm that provides, among other services, Universal Service Fund (“USF”) administration services to the telecommunications industry (https://www.solixinc.com). Note that since 09/30/21 the company has retired another 1,531 shares or ten percent of the total.

Management

Mario is a phenomenon. Mention any company, regardless the market cap, and he will tell you the contents of the footnote on page 85 of their latest 10q. He has an unbelievable ability to retain information and connect the dots. Perhaps unsurprisingly, his crowded mind often leads to a lack of focus and he enjoys spitballing value creating transactions for each of his public children-some nutty, some logical. To date that has resulted in long incubation periods for strategic reviews at several of his entities (including LICT) but, importantly, he hasn't made too many unforced errors. 

Stock Ownership

Mario J. Gabelli 197.00(1) 1.2%

Philip J. Lombardo 200.00 1.3%

Salvatore Muoio 662.52(2) 4.2%

All Directors and Officers as a Group 1,059.52 6.7%

E3M 2018 LLC 5,950.00(3) 37.6%  (Mario's llc)

LICT Corporation 1,000.00(4) 6.3%

Recent Financials

Thesis

We have owned CIBL since its existence and think it's a good place to hide out, especially in times of market tumult. We have a perpetual put option back to the company which takes care of the downside at the same time as we retain upside optionality via an announced deal. The share count should continue to shrink going forward--the company recently announced an additional 1,500 share repurchase plan which represents more than 10% of the outstanding. 

Catalyst

• Company announces a deal
• Share count continues to shrink through accretive repurchases