lessthaniv
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Posts posted by lessthaniv
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Date Open High Low Close
4/13/2012 $5.09 $5.10 $5.00 $5.01 Short Interest = 3.9M
4/19/2012 $5.60 $6.25 $5.55 $5.90 Reports Favorable Q1
4/30/2012 $6.10 $6.11 $5.98 $6.03 Short Interest = 4.2M
5/15/2012 $6.80 $6.95 $6.80 $6.87 Short Interest = 4.7M
Interestingly:
April 13th market close was $5.01/share and the short interest was 3.9M.
April 19th company announces a favorable Q1/12.
May 15th market close was $6.87/share and the short interest increased to 4.7M.
The short interest has increased 21% going from 3.9M to 4.7M over a period where the company has reported much improved numbers and the stock price gained 37% going from $5.01/hsare to $6.87/share.
*Closed today at $6.72/share. Probably over 30 days to cover based on current volume trends. Pretty risky bet on the part of the shorts.
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A black swan for the gold bugs ;)
Complete nonsense.. only people with no understanding of geology or mining would even consider asteroid mining anymore than a pipe dream...
Nonsense????
Oh, and I suppose you have your doubts for their other articles too???
Seems like legit reporting to me:
http://aceflashman.wordpress.com/category/people/
apparently "aceflashman" wasn't enough ;)
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1) During the RJR Nabisco, Inc. hostile takeover fight in 1987, Buffett was quoted as telling John Gutfreund:
I'll tell you why I like the cigarette business. It costs a penny to make. Sell it for a dollar. It's addictive. And there's fantastic brand loyalty.
—Buffett, quoted in Barbarians at the Gate: The Fall of RJR Nabisco
Fast forward 7 years ....
2) Speaking at Berkshire Hathaway Inc.'s 1994 annual meeting, Buffett said;
investments in tobacco are fraught with questions that relate to societal attitudes and those of the present administration. I would not like to have a significant percentage of my net worth invested in tobacco businesses. The economy of the business may be fine, but that doesn't mean it has a bright future.
—Buffett, Berkshire Hathaway annual meeting (1994)
I wonder if the same thing will be printed about Coke one day?
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Lot's of talk about how governments can print money and increase the money supply. All true of course. Less talk about how with gold, lot's of new financial inventions now allow investors to speculate in this commodity without ever having to worry about storage or cost of storage. Its a positive feeback loop. Investors speculate in gold by buying up GLD. The trust must physically buy gold from the open market. Prices positively effected. The rising price of gold reinforces the speculators decision and more units are acquired ...
That's the worry ... When those speculators change their mind the positive feedback loop works in both directions.
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ouch. I also don't understand the industry's reliance on VaR for risk...
racemize,
it's darn right scary. those nets are only good until a counterparty fails. then, all of a sudden things don't net anymore!!
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That analogy was less than brilliant.
Our country's businesses will continue to efficiently deliver goods and services wanted by our citizens. Metaphorically, these commercial "cows" will live for centuries and give ever greater quantities of "milk" to boot. Their value will be determined not by the medium of exchange but rather by their capacity to deliver milk. Proceeds from the sale of the milk will compound for the owners of the cows, just as they did during the 20th century when the Dow increased from 66 to 11,497 (and paid loads of dividends as well).
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any opinion of Dimon's board position at the New York Fed?
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JEast,
Thanks for posting. That was a fantastic read. What an articulate writer.
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Recently, I was invited to sit in on Tim McElvaine's investor day in Vancouver. Tim briefily discussed the technology of 3D-Printing and the implications that could have to manufacturers. China, really seems under invested in technology because labour has always been so cheap.
http://en.wikipedia.org/wiki/3D_printing
http://blip.tv/makerbot/the-colbert-report-featuring-bre-pettis-ceo-of-makerbot-june-8-2011-5262194.
This is amazing.
KFRCanuk, thanks for posting the link.
You might like this one from TED.com:
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Recently, I was invited to sit in on Tim McElvaine's investor day in Vancouver. Tim briefily discussed the technology of 3D-Printing and the implications that could have to manufacturers. China, really seems under invested in technology because labour has always been so cheap.
http://en.wikipedia.org/wiki/3D_printing
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If one believes the Euro will survive in some fashion it makes sense. Why else is the Euro at $1.27 or there abouts and not 90¢? The world thinks that the Euro will be around but with less members and subsequently stronger members. Mostly Ireland has taken there hit, with maybe a little more to go.
Cheers
JEast
Also, listen to the CEO of Fortress Paper discuss the Euro from the standpoint of a currency paper printer (Swiss Franc). It physically cannot be done overnight. He estimated years.
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Wow, I hope they release the rest and that some heads roll.
http://media.economist.com/sites/default/files/pdfs/Plaintiffs%20Opp%20to%20MSJ.pdf
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Currently @ 70.9%. Games over.
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So that makes 3 halted stocks that Wu Ruilin is involved with.
Francis Chou has somehow found a worse investment than Overstock.
http://www.cornerofberkshireandfairfax.ca/forum/general-discussion/chou-funds-13-f-6250/
Not the best investment he's ever made but put into context:
Dec 31,2011 : Owned $1.58M in a fund carrying $392M in assets. That represents .4%. Not the end of the world.
But don't let that stop you from taking a shot at him.
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Excerpt from AR:
Investing in China a Conundrum
Companies based in China are regarded with grave suspicion that makes investors skeptical about
the cash on their balance sheets. All things being equal and their revenues coming from the U.S. or
Canada, these companies would be considered undervalued even at stock prices 50% to 100%
higher. For example, take a look at Qiao Xing Mobile Communication (QXM), a company in which
we have holdings. If we look only at its June 30, 2011 balance sheet, without putting any value to
their operations, we see the following positives:
1) Net cash per share of approximately $6.20 compared to the stock price of 98-cents on
December 30, 2011. Another way to look at it is that you can buy this company for
approximately $55 million and get approximately $328 million in net cash.
2) Net-net working capital per share of approximately $7.40.
3) Book value per share of approximately $6.98.
4) On September 8, 2010, Qiao Xing Universal Resource (XING), the parent company,
offered to buy out the minority shareholders of QXM for 1.9 shares of XING plus 80 cents
in cash. The stock price of XING, which is listed on the NYSE, traded between $1.45 and
$3.55 per share from the offer date to the end of 2010. This means the value of the offer
was fluctuating roughly between $3.55 ($1.45 x 1.9 + $0.80) and $7.55 per share.
Unfortunately, on April 7, 2011, the offer was rejected by the minority shareholders of
QXM. Since then, the stock price of QXM has plummeted from $4.32 to below a dollar.
5) It is listed on the New York Stock Exchange.
6) It is currently audited by Crowe Horwath, a recognized international auditing firm. Crowe
Horwath LLP is one of the largest public accounting and consulting firms in the United
States.
The negatives are not as obvious, but deserving of caution. Key among them:
1) The founder and CEO has taken some questionable actions. Since China’s business
environment is a bit like the Wild West, it is difficult to find companies and/or management
with a totally pristine reputation. Moreover, a lot of businesses, including Qiao Xing’s, are
intertwined.
2) Most of the cash is held in China. Cash may not be accurately stated or it cannot be
repatriated to North America in an economically efficient manner.
3) Most revenue numbers cannot be verified.
4) Accounting for receipts is not a common practice in China.
5) You cannot verify the company’s numbers even though it retains a well known accounting
firm, is listed on NYSE, and thus must adhere to strict compliance and accounting
standards.
There are a number of firms doing business in China that have similar characteristics. They are also
extremely cheap, and as I’ve said, if their stock prices were 50% to 100% higher, and if their
businesses operated in U.S. or Canada, they would be considered undervalued. Yet, while they raise
red flags, we think we can invest prudently in China if we use a basket approach, keep our positions
appropriately sized and closely monitor developments at the companies.
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http://www.huffingtonpost.com/charles-gasparino/wall-street-investigations_b_1467726.html
So the October Surprise is a very real possibility, much to delight of journalists like myself. But before rejoicing we in the media should take a deep breath. These same law enforcement sources investigating insider trading among Wall Street fat cats and other corporate titans are also looking at the alleged improprieties of a major journalist who covers stocks.
We can only hope!
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I actually thought that was a good idea (and bought the shares before reading the fine print closer...), but it doesn't work. The amount of cash that's available is prorated based on the number of shares tendered, and the share part of the offer isn't worth as much as it used to because ABT is down since the offer was made. So no way to make easy money (unfortunately...)Not to beat this dead horse more than it needs to be beaten but how do others feel about loading up at $0.95 and tendering to ABH? Risk of lower ABH share valuation, risk of ABH not moving ahead to get the other 50% and just letting it dangle until it declines again? I am thinking that there is an 80% chance that FBK shareholders, now that MERC is gone, realize that it is likely that ABH will gather enough shares. Perhaps there is a 5% short term gain here? Or this just another opportunity for shareholders to lose on FBK stock, yet again?
My best guess is that the ARB guys are doing this. However, knowing the cash is limited to $70M they would likely recieve a combination of cash and shares. They could offset the risk by shorting ABH knowing they will get shares back shortly to replace and make a nice, hedged return.
That could explain the ABH downside recently and supports my line of thinking to manually transact.
good point.
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Not to beat this dead horse more than it needs to be beaten but how do others feel about loading up at $0.95 and tendering to ABH? Risk of lower ABH share valuation, risk of ABH not moving ahead to get the other 50% and just letting it dangle until it declines again? I am thinking that there is an 80% chance that FBK shareholders, now that MERC is gone, realize that it is likely that ABH will gather enough shares. Perhaps there is a 5% short term gain here? Or this just another opportunity for shareholders to lose on FBK stock, yet again?
My best guess is that the ARB guys are doing this. However, knowing the cash is limited to $70M they would likely recieve a combination of cash and shares. They could offset the risk by shorting ABH knowing they will get shares back shortly to replace and make a nice, hedged return.
That could explain the ABH downside recently and supports my line of thinking to manually transact.
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This thread may be used in future behavioural science classes as a case study in anchoring.
I disagree with this assessment. The only reason the price makes sense is if you already have a significant interest in ABH. That's the only way it makes sense.
My comment was not meant to be read as sarcasm. So, please don't read it as such.
We are all trying to become better investors. That's why we're here. Go back and start from the very first post. Read through the 6 month progression. There is a valuable lesson to be learned within. In my opinion, this thread (for the most part) has been anchored to the idea that FBK would garner a much higher take out price. Clues pointing investors to an alternative outcome were present but largely ignored. Instead, new scenarios in favour of the highest bid were spun.
Anchoring.
Obviously, Mercer got it ...
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This thread may be used in future behavioural science classes as a case study in anchoring.
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Mercer International Announces Expiry of Offer for Fibrek Inc.
2012-04-30 09:00 ET - News Release
NEW YORK, April 30, 2012 (GLOBE NEWSWIRE) -- Mercer International Inc. (Nasdaq:MERC) (TSX:MRI.U) ("Mercer") announced that its offer (the "Offer") for all of the common shares (the "Fibrek Shares") of Fibrek Inc. ("Fibrek") expired on April 27, 2012 (the "Expiry Time"). The Offer was conditioned upon, among other things, at least 50.1% of the outstanding Fibrek Shares, on a fully-diluted basis, having been tendered thereunder, which was not met as of the Expiry Time. Accordingly, Mercer and MERC Acquisition Inc. will not acquire any Fibrek Shares that were tendered under the Offer.
In connection with the foregoing, the Support Agreement between Mercer and Fibrek dated February 9, 2012, as amended, has been terminated. All Fibrek Shares that were previously tendered under the Offer and not withdrawn will be returned promptly.
Important Notice
This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval. Mercer has filed with the United States Securities and Exchange Commission (the "SEC") a Registration Statement on Form S-4, as amended in connection with the Offer. INVESTORS AND SECURITYHOLDERS OF MERCER AND FIBREK ARE URGED TO READ THESE DOCUMENTS, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS THERETO, AND ANY OTHER RELEVANT DOCUMENTS FILED OR TO BE FILED WITH THE SEC CAREFULLY IN THEIR ENTIRETY IF AND WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. Such documents will be available free of charge through the website maintained by the SEC at www.sec.gov or by calling the SEC at telephone number 800-SEC-0330. Such documents may also be obtained for free on Mercer's website at www.mercerint.com.
About Mercer
Mercer International Inc. is a global pulp manufacturing company. Mercer operates three NBSK pulp mills with a consolidated annual production capacity of 1.5 million tons. To obtain further information on the company, please visit its web site at www.mercerint.com.
Forward-Looking Statements
This document and/or certain information incorporated by reference herein include forward looking statements. Actual results and outcomes may differ materially from what is expressed or forecasted in these forward-looking statements. Such statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations. Among those factors which could cause actual results to differ materially are the following: the highly cyclical nature of our business, raw material costs, our level of indebtedness, competition, foreign exchange and interest rate fluctuations, our use of derivatives, expenditures for capital projects, environmental regulation and compliance, disruptions to our production, market conditions and other risk factors listed from time to time in our SEC reports.
CONTACT: APPROVED BY:
Jimmy S.H. Lee
Chairman & President
(604) 684-1099
David M. Gandossi
Executive Vice-President & Chief Financial Officer
(604) 684-1099
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Just to flesh the idea out ....
- Steelhead sits tight untill the PPA is announced
- Merc sells the US mills to Steelhead for FBK stock +/- cash
- Merc sells the PPA power contract for cash
- Merc sells St F to ABH for their Merc stock +/- cash
Steelhead waits for the PPA because it will add +/- $1/share to the bid. With a high enough bid they could even get the US Mills + cash back, in return for their control block. Minority shareholders see a real bid.
ABH & Merc get a gracefull exit. ABH gets a super profitable vertically integrated mill. Merc gets an equity issue & a whack of cash & treasury stock.
SD, I'm trying to follow your logic here but got lost on the second bullet point. How does MERC sell FBK's assets?
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Just a little logic arithmetic.
Either take ($1.40), or (.50¢ cash + .50¢ worth of shares that are potentially a .50¢ Dollar = $1.50).
If the shares go lower, that may mean that you are getting a .45¢ dollar or $1.55.
Cheers
JEast
JEast,
I agree 100% with this line of thinking although I'd make the following caveat: One can drastically improve their position by transacting manually.
The cash/share option from ABH is:
$.55/sh in cash
.0284 of a Resolute share
The cash option from ABH is $1:
Therefore;
Cash/share deal is valuing the Resolute shares as (1-.55)/.0284 = $15.84. This was ABH's market value when the deal was announced. If you tender to ABH and get the cash/share option your ABH is being valued at this level.
However, the market value of ABH has dropped below $13/share or roughly 22% below the transaction valuation above. An investor who wants to go the ABH route can capture this upside (less friction costs) by transacting manually.
Here is an example using the all shares option:
Investor A has 1000 shares of FBK and tenders to the deal:
Gets :
(.0632 ) * 1000 = 63 shares of ABH
Investor B has 1000 share of FBK and transacts manually:
Gets :
Sells 1000 FBK @ $.97 = $970
Buys $970 ABH @ $13 = 75 shares of ABH
Now .... if a guy was smart enough to transact when FBK was trading at $1.15/share well the benefit would have been even bigger. ;)
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not sure if this has been shared yet but i found it interesting.
May See a Massive Squeeze in OSTK!
in General Discussion
Posted
I could also see Prem and Francis doing a straight debt deal to buy in stock as was suggested. OSTK basically has no debt at the moment. Prem and Francis have been recent holders of OSTK debt. If they did a straight debt deal they could put a chunk of money to work at reasonable rates. (Say even $60M at 9%). It costs about $5.4M annually. The cash gets used to buy in stock of which both Prem/Francis amung the largest holders. The buyback concentrates a larger piece of the pie into their hands, raises the stock price significantly given the high short interest, puts $60M more to work in a safer part the capital structure at a reasonable rate.
Everybody wins!