I don't remember the exact language but it was some Dutch provision...let me see if I can find it....perhaps it was some restriction along the lines of the tax provision ...
headofganesh, please show me the link to the SEC filing? I combed through the SEC filings of CBI and could not find the poison pill provision.
But I did find this, which is relevant.
"As a company incorporated in The Netherlands, we would be classified as a “controlled foreign corporation” for U.S. federal income tax purposes if any U.S. person acquires 10% or more of our common shares (including ownership through the attribution rules of Section 958 of the Internal Revenue Code of 1986, as amended (the “Code”), each such person, a “U.S. 10% Shareholder”) and the sum of the percentage ownership by all U.S. 10% Shareholders exceeds 50% (by voting power or value) of our common shares. We do not believe we are currently a controlled foreign corporation; however, we may be determined to be a controlled foreign corporation in the future. In the event that such a determination is made, all U.S. 10% Shareholders would be subject to taxation under Subpart F of the Code. The ultimate consequences of this determination are fact-specific to each U.S. 10% Shareholder, but could include possible taxation of such U.S. 10% Shareholder on a pro rata portion of our income, even in the absence of any distribution of such income."
There isn't much of short position on CBI and rightly so. Shorts are usually smartest folks in the room as they have to get direction and timing right since there is a natural upward bias to the stock market.
Having said that, the market makers like to shake the tree up and drop the price to trigger stop losses and such and shake out weak hands.
Bloomberg news item dated August 21, 2014 headlined: “Berkshire Defies Short Seller by Adding to CB&I Stake”.
Head - Thank you for explaining this once again to everyone… It's getting tiresome that this is becoming a concern. Berkshire has likely not sold and this stock has attracted some other big names like Gotham and Van Buren… Barclays also reiterated there rating and price point… What else more do people want?
Last time I checked … the Company has locked in contract over contract over contract…. maybe the execs are more concerned with running the business and will let the financials and forward guidance speak for itself… just my two cents.
President Obola needs to authorize oil exports or give some massive federal natural gas incentives, CBI will benefit from both as will the USA
Sentiment: Strong Buy
picked up same shares at 46 and added at 47+ I am now rather heavy in CBI. I like the forward projections and can see 55+ in this year and higher beyond.
I think you are too focused on the Nuclear. Sometimes when you work in that Division, you see too many problems and become negative on the whole company.
I think the strategy they need to follow on Nuclear is "containment" ...sorry for the pun...but contain the problem....the nuclear is not growing right now ...so that was never going to be the gem....they just need to manage and contain the situation until they are OFF the critical path.
The rest of CBI is doing great. The annuity business of Lummus/Tech is growing nicely. Someone said that they only receive money when the plan is in operations.Yes, but there is a pipeline of stuff being built so even if one starts build today, another one will be completing tomorrow. Whats more...the annuity is incremental ...its a fantastic business. Long as those plants are in production and are producing product, the license fee per unit it owed to CBI. There is not much competition of profitability issues here once they go to production. If you look at their slides...they clearly show that Tech/Lummus is a highly profitable business. Now the other side of CBI (except nuclear) has some $30B backlog. Contrary to opinion that as oil and gas decline, their need declines, I think it decreases in some areas, increases in others. Cheap oil and gas actually means more refineries, more gas power plants, more product plants to produce ethylene and fertilizer and stuff...alll areas that CBI excels at.
Even taking a very pessimistic view on Backlog and say it gets cut to $15B, that would tie them over until global recovery is solidly in place
Don't focus on Nuclear. They are past the worst and now they are in containment mode. They have good managers (they fired all the SHAW managers at Louisiana plant) in place now and finally ahead of the curve on the nuclear issue.
Non-GAAP earnings per share estimates for third quarter 2014 from 19 analysts range from $1.20 to $1.49 with a mean estimate of $1.41. The earnings per share estimate increased by 25.61% from the same quarter of the previous year.
Over the next 3 to 5 years, three analysts estimate the non-GAAP earnings per share to grow by 14.67% on an annualized basis with a range between 9.00% to 20.00%.
Sentiment: Strong Buy
I beg to differ, investor communication and maintenance shareholders value is part of job of CFO. I don't know why some get confused
The fact that the shares fell from 85 dollars to 50 dollars shows that investors are nervous that prescience short thesis might be true.
if the claims were false, CFO and IR just let company stock suffered volatility of 40% would be a poor job on their part because shareholders lost 40% over nonsense from 1 little no name analyst.
They just didn't do enough before it got out of hand.
Too many people confuse management job roles. CFO and really the rest of the officers are there to manage and grow the business NOT to manage stock prices. They have instituted a nice buyback, and i would imagine most investors would be happy that shares are getting repurchased cheaply.
Guys on this nuclear overruns let's step back and look at the entire landscape.
These 4 units are really the only new nuclear plants in new construction in this country. Due to Shaw's excellent marketing skills they convinced two very important regulated utilities to go with the AP1000 units. No one in the nuclear space wants the first new nuclear units in the Us in over 30 years to have huge cost overruns and schedule delays (even though Shaw was not really up to this huge initiative)
That being said all the parties will find a way to "minimize the damage " from both of these sites. It won't be easy because in both cases you have the public through the respective PUC's involved....
At the end of the day everyone involved will have a haircut..
by the way this does not mean that there will not future problems...more than likely that will happen...but for now let the CBI stock price go up...but later on you will need to sell. CBI still has no real clue on the power part
Sorry for the multiple posts but I am on a roll here...lol
All of these issues were well know since 2012 onwards and initially it got worse as CBI tried scrambled to get ahead of the curve with the SHAW issues....
As they made progress towards curing the issue COmbs/Weschler increased their stake and if you look at the progress reported on the Quaterly calls, they are finally making good progress on the nuclear issues...so these are multi year known issues and Buffett/Combs added in Q2 knowing these issues and their progression...also Tepper and Van Den Berg added too....
In my opinion they would not have added if they felt nuclear issues were deteriorating further and would consume the company....I would currently categorize them as stable and improving...so the nuclear issues are a bit like looking in the rear view mirror ...as more information is made public by SCANA and power authorities....