Unbelievable the idiocy of this deal with taking on the pension liability, the large amount of share dilution etc. to purchase this underperforming #$%$.
Olin Evaluating Idling Or Permanently Closing 250,000 to 450,000 Tons of Chlor Alkali Capacity *
Didn't they just acquire more from DOW? They beat earnings though...
Earnings coming up, stock has been performing badly, big DOW deal almost done, 10% short interest, but also hedge fund interest, and many insiders recently exercised their options, but did not sell. Seems like someone knows something? This strange chemical and ammo company could be in for a big rebound. I could be wrong of course, but company has shown recent big price moves following earnings this year, and current P/E is reasonable.
Pickep up a few shares a week or so ago. Seeing nice steady upward move. Next stop $22 then $25 or more. The divvy is icing on this cake. I think OLN could be a good, long-term hold.
Interesting..........2015 EPS 1.18 on 3.3 B revs. 2016 estimates EPS 1.70 on 6.8 B revs.
Current SP 10 X forward earnings..........LOTS of growth coming. Collect 3-4% to watch the share price increase? Sure.
All the best
Dow shareholders have to turn over current shares of DOW to convert similar to what PFE did with its Pet Business . When those shares are turned over for conversion they are retired benefiting those that hold on to a more pure DOW co in theory . The 80 cent dividend is suppose to be continued . Not sure exactly how this type of spin will effect the stock . Shares held by DOW should be hitting the market putting downward pressure . Shorts seemed to key in on that but they have to cover sometime and pay the dividend. I would expect covering to move the stock up from here until spring at least barring a weak market .
“This landmark transaction is the latest in a series of milestones we have achieved that enables Dow to significantly exceed our collective divestiture targets, and enables Olin to create a premier chlor-alkali and derivatives company with the scope and capabilities to leverage long-term growth opportunities and generate significant shareholder value,” said Andrew N. Liveris, Dow’s chairman and chief executive officer. "This exchange offer is designed to maximize total shareholder return through the ability to own shares in the combined company, which is expected to benefit from substantial synergies and create significant benefits for customers."
Key elements of the exchange offer:
Dow is offering to exchange all shares of common stock of Blue Cube Spinco Inc. (“Splitco”), a wholly owned subsidiary of Dow, for shares of common stock of Dow that are validly tendered and not properly withdrawn. Dow shareholders have the option to exchange all, some or none of their shares of Dow common stock for shares of Splitco common stock, subject to proration as described below. Shares of Splitco common stock will automatically convert into the right to receive 0.87482759 shares of Olin common stock at the closing .
I have to think some of the latest move up is covering . S and P has a buy on the shares target $25 . Zacks must need to cover ? Glad I faded a few shares on the announcement when they were $33 . Not enough I am afraid . Added to my position recently .
The problem now is your near the bottom . Look at the options market . She is happy with the 20 cent dividend . Nov has $20 options then tails off later in the year . I am thinking of buying shares here or in AA and selling a covered call hoping to get taken out to deliver older shares for a tax loss while making a little pocket money now . Really screwed up not taking the $30 plus earlier this year drunk on the talk surrounding the merger that will take at least 2 years after closing to see synergies and move the stock . I believe they may spin Winchester and or raise the dividend then but it is prohibited earlier so we wait . If your in selling options out of the money hoping to hold your stock is the best way to wait . I bought a few thousand shares of this when it was $6 years back the easy money has been made .
Good thing is Moodys thinks the deal is ok also most chemical companies are at their 52 week lows. Have to wait for all the Dow holders to sell their Olin shares. It will take a couple years to work all this out.
Today I heard some negative press about the DOW merger having to be financed at Junk Rates of almost 10% . That will take a bite out of the synergies . Kicking myself for not selling all my long term shares at $33 . Instead I patted myself on the back and sold coverred calls on 80% making $1.50 a share and locked myself up until the stock was in the low 20's . I did sell 20% and added back at $17 before I learned of the interest rate . All in all I believe in the new lower target price figured by S and P of $25 . I dream of seeing a dividend increase off that .80 cents but if their paying 9.72% interest on the merger I guess I will be dreaming allot longer .
Bud; I tried to talk her into diversification but - and I know this is politically incorrect - have you ever tried to give advice to a stubborn German? No wonder they lost two world wars. And the crazy part is there are a lot of Germans who think they won WWII. (on second thought maybe they're right cause Germany now is a vibrant country with rebuilt infrastructure and a strong economy). Paul
Ammo is a golden goose for OLN. While they could spin it off I expect it would be at a premium.
Historically speaking it can go to 10, however OLN is not the company today that it was before. I reestablished a position in OLN in the higher 16's and I have always felt OLN is a buy under 20 for making money in the buy/sell range at that level, particularly with DRIP over medium terms. I would think there is a good floor here. It may be impossible to buy their bonds due to institutional preference, however I would certainly take a position in them if available. OLN is reasonably well insulated and has Winchester/Ammunition as a hedge in down cycles that has really been quite a transition from old to new.
I agree 90% OLN is heavy, then again it depends on the value of holdings. IF she is spending the dividends to fund retirement or if she is DRIP to accumulate. I suspect the former. So while 90% is pretty heavy, she could have made worse choices and I see no alarm bell, other than being generally overweight in the stock. Nothing I would lose sight over as OLN has pretty well defined cycles, IMHO.
I'm only in low to mid 5 figures right now, however if opportunity strikes I would certainly increase to 6 figure holdings without hesitation.