If you take a look at how many shares in AGU were held short a year ago, you would see that it was very tiny, representing a mere 1.6 million shares. As of the end of October, however, that number has climbed to over 4.8 million shares which means that the figure has tripled. I have to believe that those holding their AGU shares short can't be too happy about the recent rise in the share price. The AGU short interest chart shows that it wasn't until mid-July that Shorts started increasing their negative position in AGU and it has pretty much been climbing ever since. It will be interesting to see whether the current figure drops significantly once the mid-November statistics are published. In the meantime, the news regarding AGU has largely been positive with the arrival of an 'anchor' hedge fund investor, a 4% bump in the dividend with expectations of more to come within the next 2 years, a number of upgrades to the $110-$115 range, some cost cutting and consolidation and an end really soon to the substantial CAPEX to expand potash production. Shorting AGU right now looks like a really bad bet to me but I am just an incorrigible LONG who really doesn't care whether others lose their money betting against the company.
You are right about the behavior of the lemmings but until this stock once again starts heading down and keeps going down, it is highly unlikely that ValueAct would already be heading for the door. We haven't had much to cheer about until recently so we might as well enjoy it while we can. Certainly the bozos running the show over at AGU could care less about whether we make any money or not. They are all doing well which is their prime consideration.
I own this stock. But it always surprises me how the lemmings run when some activist is reported to be in a stock.
He could easily get back out before the lemmings turn....irrational
I hope you are right but I have this sneaking feeling that the chuckleheads at AGU are patting themselves on the back for the snap back of the share price as if the market were endorsing their management of the company. There is all too much 'not invented here' mentality at AGU with a conviction that nobody has any good ideas as to how to run the company unless that person already has his or her buttocks in an AGU BOD or management seat. MOS and POT are down while AGU is up which should tell one something. However, the AGU crowd really doesn't care whether folks like us make any money here or not. What they care about instead is that their compensation remains robust. Which is why I continue to believe that unless there is a serious shakeup over there, we aren't going to get very far unless of course the commodity markets bail us out big time which I am not counting on.
ValueAct is one of the best in the bunch. AGU mgmt successfully painted Jana as a rash hothead and started the mud slinging (Jana took the bait), but it will be hard to do the same with ValueAct, a mature credible organization with good history that speaks for itself. MSFT is the latest example where ValueAct stepped in and turned a very big ship around. For AGU shares to spike the way they did, I believe the market is hinting that something very positive is about to happen.
I agree with you wholeheartedly. Nobody could have reasonably anticipated the depths to which AGU management sunk in order to maintain the status quo. You are right again that the new guy on the block is not going to accept the buzz saw lying down. As far as AGU management is concerned, I don't really think they or the BOD cares that the stock continues to flounder and that one misstep after another prevents any meaningful progress. Of course management continues to waste large amounts of capital on CAPEX to augment the operational capacity of goods nobody wants or will want for at least 5-10 years if then. If ValueAct is smart, they will not tip their hand until they are in a position to actually change the reality on the ground. Which from my vantage point translates as joining hands with like minded hedge funds who are ready to take on management from a position of strength. I have been waiting for something good to happen since 2007. I am very patient and have all the time in the world. I still believe this company has a great deal of potential. It just needs folks with the vision and willingness to unlock it.
I think Jana was not ready for the trickery and deception deployed by AGU mgmt. I still can't believe buying votes and coercing bankers are allowed!!
ValueAct will learn from Jana's experience. And remember, AGU shares were outperforming when Jana was trying to enact change. Now, the winds have turned against AGU mgmt. AGU shares have floundered this past year because the thesis post-Jana have failed. ValueAct will have more leverage. And maybe Jana might want to take another stab at this.
Something just occurred to me. The reason why AGU was able to stuff JANA was that even though JANA had acquired over 8% of the outstanding shares and was the largest shareholder, it wasn't enough to offset the company's shenanigans. Which tells me that a similar fate is likely to occur this go around too. But perhaps not if, say, another hedge fund investor comes in with like minded objectives and their combined share percentage is in the 15% range. Skullduggery will get you only so far.
You are right. Management and the Board are just a bunch of amigos interested in enriching themselves at the expense of the shareholders. I just read that the new investor intends to discuss strategic matters with the company and will undoubtedly attempt to get some of their people on the BOD the way they did at Microsoft, for example. But we have seen how the AGU folks play when somebody comes along to try to upset their applecart. My own sense is that what improvements there have been in terms dividend increases and corporate streamlining of the retail operations is largely the result of the efforts JANA previously made as they hammered the company on a number of items.
I wish the new guy on the block the best of luck because they sure will need it. And if they get rope a doped too, the stock will head back down with the rest of the AG names like MOS and POT.
AGU and its shareholders deserve better. The way mgmt schemed to keep their jobs when under Jana's scrutiny should be punished. Their thesis post Jana has clearly not worked out, evidenced by quarter after quarter of misses. It has severely under performed CF Industries.
Their disclosure says they picked up a 5.7% stake in the company but didn't say anything else so for the moment it doesn't look like a JANA situation in which the outsiders are telling the company what they need to do to enhance shareholder value. For now it just looks to me like some short covering combined with some decent buying. So now the question is what do they see that we don't? And what is the shelf life of the current euphoria? I remember that JANA believed that with the right moves, AGU would be worth ~$150.00 but that involved a spinoff which would separate retail from their producer activity which the company isn't interested in pursuing.
In the meantime, we can enjoy the bump while it lasts.
Now why is that? They just pre-announced that Q3 and Q4 will be weak. It is already down 2.5% on that news. Looks like elevator down to me.