Can it be any worse. Declining stock price. Stagnant dividend. No earnings growth. Look at their payroll all the fat cats just soaking up all the Revenues that never make it to the bottom line for us stockholders. I can not believe the Board tolerates such pathetic performance of a fat overpaid management team.
From what has been said so far: Olin will benefit from the larger chlor-alkali & bleach sales area. JV makes Olin a much more vertically integrated company with more outlets for chlorine. Low cost Dow plants will help bottom line due to scale. Olin will now be a bigger, more diversified, and stable company with less downside risk.
The bad side: high cost plants are now ripe for shutdown; demand/growth for all commodity products is still limited; small 2% growth potential if Olin remains in commodity chemicals; ECU prices/demand still tied to economy; continued high capital outlays for plant maintenance and upgrades (most of the plants are decades old); vulnerable to higher energy costs (just a matter of time until $100 oil again); captive use of Cl2 but still a need to dump caustic - continued pressure on ECU prices; all new ECU sales will still mean high shipping cost; legacy environmental costs and other legacy costs for pensions, health care, legal, etc.
Net - Olin will be a bigger, slightly more profitable company. But still a commodity chemical business. SSDD.
Dow is the winner with less capital demand and continued captive supply chain. Olin will make significant gains only if they continue with vertical integration into ECU based products. Otherwise still just a cyclical chemical business with many more outstanding shares. I see future stock prices in the 10-14 PE ratio, $25-40/shr vs. recent 20-28 range. 2-3% dividend continues. A HOLD for now until the dust settles and we see the net impact. Congrats to long term Olin holders and hope the May 30 Call holders are the subject of immediate SEC investigation and persecution.
I believe you . I needed cash so I sold some $35 calls and it looks like they will get called away soon . Not sad I did need the money and their are two years worth of restrictions on the dividend and any spins . Luckily I kept some ......
Her husband worked for olin and she's been watching this stock for years. Says it will go t0 $49. Meantime as a holder of EMN I've been watching it fall from the mid $80's. Should I switch chemical companies? Is OLN better than EMN? Paul
Can't believe people sold out of this at the end of the day. We should be up over $35 after latest news. Great opportunity here to add shares and hold.
Sentiment: Strong Buy
The foreign operations of Dow will be a blessing as well as the new USA locations that will allow OLN to expand within their sales territories here as there were still large gaps in coverage in North America . Not to mention being the lowest cost producer of Bleach and the largest Operator by volume in North America . With the vertical expansion and a increasing dividend in time the total return will be attractive for retiree's and institutional investment . If the combined entity shaves 200 million off costs to end up as FCF total return should be back in double digits with a steady as a rock company that trades in a tighter range . Sure Chemicals are cyclical but people need bleach and ammo all the time . All industry dependent on energy will be interesting going forward if hydrogen fuel cells keep progressing like we have seen in PLUG . Can you imagine plants creating all their own power for half the cost or less ! My lone energy spec play uses former stranded NG that was flared to steam their frac play in the oil sands PGH at Lindbergh profitable above $35 USA per barrel .
From my basic understanding of the merger it will make OLN the lowest cost producer of several chemicals due to having a infrastructure that includes hydro electric power and natural gas fired plants . The big boys of the Dow long ago obtained their own Utility resources to cap costs not something a small cap like OLN could do until now as we see the new mid cap OLN evolve from this merger of assets with a combined management team. Within the first few years another $1 a share in earnings should fall to the bottom line at the same time as cyclical forces will be also adding to earnings . After the two year agreed on period I expect regular dividend increases from OLN again . I sold $35 May calls Friday on half my holdings but expect to hold my shares for a long time . At one time the shares were up $6 . Fair value was always around where they are now IMHO and now there are more reasons then ever to hold especially with Winchester constantly booked solid for business years ahead .
mhectic................you hit the nail on the head. But at least it wasn't going the other way....congrats to the longs; your payday is today!!!!!!!!!!!!!!!!
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Its posted phony messages are on most message boards.
Now we know what those May 30 calls were all about. As a long time holder of Olin, this couldn't make me happier. I hope no one was piggybacking off of trading god's advice.