In my opinion, $4 copper would produce stock price in $40s easily. Stronger world economy means strong copper price and left part of this equation already points to north. Both U.S. and Europe are out of recession and it means greater market for Chinese manufacturers and it means strong pricing for base metals ahead. In other words, stock price could be propelled up by both market fundamentals and sentiment.
Copper is the best base metal to play market upside; it is relatively protected from miners doing stupid things (over-producing and flooding market with too much metal). Iron ore and met coal (aka TCK) should be on winning side too, imho.
So thats an electric car. Honda will have a 2014 Accord Hybrid. These cars have bigger city gas/battery economy than highway however I do tend to use both. Going away highway Going back local. So lots of copper windings means car companies will own copper mines in a top down business structure. See I'm not even an MBA.
Right now at 28.2955 it stays below 30. Traders made $10 a share. So who needs them let them stay way for good like Cramer.
The share sale would be a first step in listing the individual parts of the conglomerate, which has a market value of 310.5 billion pesos ($23.5 billion).
Whats 2.03 billion in a 23.5 billion company.
SCCO is a plain vanilla copper company, operating in the most common (i.e. good) locations (Mexico and Peru). It may not generate much excitement, but it will go up steadily together with world economy. Copper is always in demand and mining opportunities to expand output are limited, especially in good places. SCCO will increase production almost twice in 2014-17 and it all comes from the same good locations (Mexico and Peru), nothing from Zimbabwe or U.S.
It wasn't Northern Dynasty pulling out. Anglo American walked away after investing 541 million.
And it was not the public protests. It was the socialist pig's greenie EPA which came out against the project BEFORE they even submitted an application. This is a classic of over-regulation killing jobs created with private capital.
And where's the Keystone pipeline? Turdhead is wondering why Canada didn't stand up behind him on bombing Syria. DUH!! What a stupid, socialist amateur.
OK, I'm just back from the north woods and a little sick so I'm not thinking too clearly.
So ...... my question is, IF GRUPO is in fact delaying an IPO, why were they thinking about an IPO in the first place?
Could it be that GRUPO needs/wants the money and if so, could this delay in the IPO harken to an increased SCCO dividend payment in the near future?
Or, am I just overthinking this?
Once you have a publicly traded market cap for AMC, you subtract the market value of AMC's stock in SCCO and you have the market cap for ASARCO. Then we get forced into bed with ASARCO via an exchange of AMC shares for SCCO shares. Then Grupo has bulletproof evidence of Asarco's value.
I hate the thought of buying into cost bloated Asarco, but at least it will be valued by the market instead of the hogs at grupo.
So .... what you're saying is that GRUPO wants to establish a market value for AMC (SCCO/ASARCO/etc.) .... I get that.
And ..... to establish that value, GRUPO is willing to give up some ownership in exchange for cash from the IPO .... just not yet.
So ..... to establish a AMC market value AND obtain cash GRUPO is willing to give up some ownership, some future dividends and some future potential equity appreciation (or loss)?
They could always make-up for some of the lost dividends by declaring a higher future pay out (milk the cow).
Could all this monkey motion mean: #1. GRUPO has lost some confidence in the business and/or #2 that GRUPO has a NEED for cash and/or #3 that GRUPO thinks that AMC holdings are presently undervalued? If it's #1 that's not so good, if it's #2 and they've delayed the IPO, then we might be looking at a higher dividend pay out or if it's #3 and we ultimately get AMC shares for SCCO shares then ........ what's that mean to us other than we're also tied into ASARCO's higher costs ..... a spin off the ASARCO portion of AMC ..... you tell me..
What am I missing? Your thoughts will be appreciated.
Backing up: Grupo dumped Asarco into bankruptcy. Before the dump, Asarco sold scco (then pcu) stock to amc. While Asarco was in bankruptcy, scco acquired the Mexican mines from grupo in exchange for scco stock. At the same time (2004) other big shareholders of scco (phelps dodge et al) sold out of scco, leaving amc with 75% or so of scco with us public owning about 25%.
The bankruptcy trustee sued grupo for breach of duty in causing Asarco to sell scco stock to amc. The trustee won....amc had to give back to Asarco 10 billion dollars or scco stock. Grupo then HAD to buy Asarco out of bankruptcy to extinguish the judgment. Sterlight backed away from a 1.7 billion deal to buy Asarco and grupo ended up paying 2.2 billion (too much) to get Asarco back so they could do away with the judgment, which they did. Then they proposed merging scco with Asarco via exchanging amc stock for scco stock. Gropo valued Asarco at about 6.5 billion less than 18 months after they paid 2.2 million (the robber deal). Some shareholders immediately sued for breach of duty (overvaluing Asarco).
Some shareholders also sued grupo for overvaluing the Mexican mines when scco exchanged stock for minera mexico stock. They won and last year grupo paid scco 2.1 billion which was distributed in last nevember's 2.75 dividend. After this loss, grupo dropped the robber deal.
So now grupo owns almost 82% of scco and 100% of Asarco via amc. IMO, bringing amc public is a means to value Asarco (by subtraction) so they can again try to merge scco with Asarco.
Forget about your increased payout ratio dream. It ain't gunna happen until the expansion project is paid for.
Forgive me for my fuzzy thinking .... I'm still a little sick.
I can fully appreciate why GRUPO/AMC may want to establish a value for ASARCO.
I'm not so clear on the impact of merging SCCO/ASARCO other the normal advantages of scale that would come from reduction of overhead, sharing of certain assets, facility reductions, etc.. Maybe the cost savings would justify this move despite the fact that some ownership would have to be relinquished.
But ..... considering ASARCO's present cost basis and perhaps the strong position of the USW it may make more sense spin off ASARCO IF a favorable evaluation can be established. But one never knows ..... the proposed AMC IPO may just go the other way and establish a low value for ASARCO.
Then one must ask the question: what's it worth not having the third largest copper producer in the U.S. compete against you?
Does anyone know the state of ASARCO,s facilities with regard to potential capital needs especially the refinery and the smelter?
Here's a hint.
ASARCO is now demanding changes to the "successorship" portion of the current union contracts now being negotiated.
If ASARCO is successful in eliminating the "successorship" clause in the current expired agreement it would mean that any future buyer of ASARCO would not be obligated to recognize existing unions or to continue the employment of existing union employees.
This info comes from the USW website which details the latest issues regarding progress of contract negotiations with ASARCO.
Needless to say ..... the unions are VERY UNHAPPY about this new company demand.
Very interesting ..... can anyone say "spin-off"?
Hmmm ..... Now that SCCO made 30 it looks like my crystal ball was 100% correct back in mid-August.
What's that saying about the acorn and the tree rat?
Could this be the tie-in that is PARTIALLY behind the purposed IPO?
That is, "construction costs are expected to be higher than initially forecast" ...... thereby the need for more cash to pull them off. The IPO may generate some or all of the cash needed without going to the credit market in an atmosphere of forecast higher interest rates. Combine the added cash generated by the IPO with the possibility of a future spin-off of ASARCO (after a value has been established) and AMC/SCCO could probably handle the capital costs of expansion and end-up in a stronger cash position than at present. If so, it looks like a good plan.
When you returned from the north woods you said you were feeling a little sick. I think it might be poison ivy in the brain. Your "possibilities" are logical lunacy
Youse comments have made me feel even badder and youse knows how sensitive I be to the suggestion that I not be the sharpest knife in the drawer.
So am I to thunk dat youse thunk my "possibilities" are logical ...... but foolish (or even insane)?
Let's see ..... I thunk its possible dat Grupo/AMC wants/needs cash for some reason ergo the proposed IPO.
I thunk it also be possible dat Grupo/AMC wants to establish a value for ASARCO which would be another reason for da IPO ..... but at the cost of some ownership and we's all know dat GRUPO in da past liked increasing dare ownership. Youse agrees with dis one I thinks.
An dat once a value for ASARCO be figgered den day may wants to put ASARCO up for sale ..... especially since day just added "successorship" to the bargaining table with the USW and eliminating "successorship" from the ASARCO contract with the USW would be a positive to any future buyer.
I den figgered dat an IPO and spinning-off ASARCO would generate plenty of bucks dat could preclude going to the capital market (in a forecast higher interest enviorn) to get monies fer expansion and maybe even leave plenty of bucks in the kitty.
I'll now adds it be possible that if all dis happens, dat those extra bucks could be used to pay down debt or even buy-back some of the equity lost in the proposed IPO.
So ..... please tell me wheres these "possibilities" be foolish or even insane. To me day looks like good planning even if day don't all come to pass ..... keep in mind dat even if day don't spin-off ASARCO it may be possible to lower ASARCO costs through economies of scale (i.e overhead reduction, facilities sharing or elimination, etc.). By how much I don't knows.
I likes to think ahead to figger out the reasons why a company I gots money in is doing things so's I can be better prepared for things that might make or loose me bucks ..... plus it amuses me and helps keep my brain young.
Forgive me but my spell-check seems to have gone kaflooey.