I caught that discussion as well. I thought it was a pretty good assessment of some of the basic tenets of the thesis that has been in place for a few months now in the steel complex. I'm sure some of his viewers were probably wondering why he didn't catch on to this thesis a little earlier in the face-ripping move higher, but that would have been a little too contrarian for him. He did seem to advise viewers that some of those names need to come back in a little before committing new money.
I think MT has done all the right things to take worst case scenarios off the table, including the prospects of a significant credit event. I believe that prospect was a key thesis for some of the net new short sellers in recent months, as compared to the technical breakdown and the total collapse of earnings due to overcapacity, which was the short thesis 12-18 months ago. It got to be a very overcrowded trade that's still in the process of unwinding. This has all of the characteristics of a legitimate trend reversal versus a dead cat bounce.
Having said that, there's still a lot of overcapacity relative to the sluggish global demand picture, so I don't expect this to go up in a straight line. I expect to see some violent swings in both directions as it seeks out a new equilibrium. New money will start coming in on the short side to play the technical retracements and/or long/short pair trades, but those can actually help catapult moves higher as traders cover at key support levels. It should be very interesting to watch over the next 8-12 months.
Arguments for American steel co's according to baldy locks:
- The Obama administration slapping a 266% tariff on Chinese Government subsidized products.
- Dollar showing signs of weakening
- Economies of Brazil and Russia are in the toilet for different reasons
- Chinese econ was slowing down but it hasn't been until now that the PRC is realizing it can't flood the world in steel anymore and cutting back on domestic production.
Where does that leave MT?
- The Europeans are, according to Cramer, following Obama's lead and looking at addressing the steel glut with tariffs of their own. That should favor MT.
- The $3 billion equity will be used to retire some notes, which will be great.
- A new credit facility of $1 billion secured last month.
- Liquidated unprofitable facilities
My thought is that NUE, X, and AKS have had nice runs lately based on anticipation for Q2, but we will not see that the run is really made of until they start talking about Q2 #'s this summer. The enthusiasm for NT has not been quite the same, largely due to is debt load and a weak European market if I hear and read the analysts right. As such, if the steel price is truly on the rise in the USA and eventually Europe, while MT is addressing its debt to equity ratio, it seems that MT is likely the next company to have a run a great hold for the near future?
Any thoughts you like to share?
We might not get the chance to buy at under 4 ...I will still buy but this changes my timeline a little.
I bought bombardier in the mean time but that didn't produce much profit so we have to wait a little.
I do believe MT will be back up there paying dividends.
Good luck to all
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I called my broker and he said that he didn't know if we were allowed to the rights. Meanwhile tdw is telling my buddy that they are not aware of anything
in the meantime someone on here is saying that he sold them at 1.41 .
I call back my broker and he says yes I am intitled but the rights will be in my account soon.
My buddy talks to a head honcho of tdw who tells him that they will sell his rights and deposit the money.
I finally see the rights in my account and sell them at 1.31 .
My buddy calls and tells me that he got his money(they were sold at 1.21)
My other buddy who didn't get a hold of anyone gets the money deposited in his account automatically
Why is there different procedures and different prices ? because they are scammers . If I had shut my mouth I probably would have lost the extra 10 cents per share .
Are you kidding me? Nothing ? ... my buddy didn't know anything about it but the money from the sale of the rights was deposited in his account anyway.One buddy said he called tdw and they knew nothing about it but put the money in his account afterwards.
I'm sorry - I'm still missing the point. What are they protecting themselves from? If the rights can't be exercised by Canadian residents, what else would TDW be expected to do but cash them out and send the proceeds? It sounds like the only complaint here is with the legislative body or regulatory authority that enacted those restrictions for Canadian residents.
superior .. I see it your way ... this is a family owned business.If they wanted to jump ship they would have planned it that way a while back. Instead they started to cut overtime and lay off temporary workers at plants that were making money.I believe they saw it coming and are looking for the future...I could be wrong,I have been wrong before ,Nortel ...cough ... cough ... I nearly choked saying that word ... Which reminds me : I watched the Batmanvs Superman movie and one of the characters was using a NORTEL telephone ...What's up with that ? .. It ruined the movie for me ..good luck to all
Consider yourself lucky. Been away for awhile and not aware of this option. Got letter from broker past the cutoff date and got nothing.
$15.86 is MT value based on book value (now .29 book).
These things ALWAYS recover eventually based on my over 50 years investing.
Iron is no different than any other metal.
MT will benefit from anti dumping laws.
They have plants in Quebec, Baffin Island, Port-Cartier, QC Canada, Montreal, QC Canada, Fermont, QC Canada, Baffinland Iron Mines Corporation, list goes on.....
They bought Dofasco in 2005, Québec Cartier Mining Company.
But MT is not listed on any Canadian stock Market and that's the reason we were not able to buy.
TD Waterhouse morons wanted to protect themselves.
But don't they have plants in a lot of third world countries?
Kidding aside, I think that all has less to do with MT and more to do with Canadian securities laws with respect to the rights offering from a NYSE-listed ADR. I wonder if those same restrictions apply to TSX-listed companies. Either way, it's better the brokers are on top of things and sell the rights at the first open market offer price than sit on them until they potentially expire worthless. It protects their clients who might not be paying attention or understand rights. I think 1.20 was a fair price when they first opened for trading.
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I also have a friend that retired from MT in Pa... We were in and out of this when it was above 20 dollars.. Luckily we lost none but we would be in bad shape now if we had held..THE offering last month was not for USA holders of common stock.,,so I sold what I had at a very small profit.. I`m thinking it will dip one more time to 4 or slightly below .. If it does I will buy back in with a considerable amount.. Right now it looks a little sketchy..
I've heard this too.
I sold mine at 1.31 while my buddy was told that his were sold automatically at 1.20
Bunch of crooks ... my broker wasn't sure if I was even allowed to sell the rights.
My voting papers also arrived past the due date... are we Canadians considered a 3rd world country een though they have plants here ?