i have to say, few "services" draw my scorn quite like Zacks. i recall them making GNK a number 1 rated stock just before it fell 30 points 3 or 4 years back!!! then quietly easing their ratings down until it was lowest rated, 4, and no mea culpas or "stupid us" excuses. just slink away as if losing 50% in a couple of mos is ok. scam may be too hard a word, but they are just one more "suit" looking to get a piece of Your money for a bs "service. they don't know thing one about shipping, but that never stops them from sitting on or hyping something as it suits them. oughta be a law!!. mho, of course
Moody's formalizes increased cap structure and stability of parent CMA CGM with upgrade to B2. of course they've missed almost best single bond trade last 3 to 4 years running, but they're a rating agency. nuff said. the upgrade, plus CMA's recent 13D filing "suggests" the big dog now has time to deal wit some of its smaller but still valuable assets. 45%+ of GSL definitely fits that bill. mojo like Paul Simon, still long, after all these years!
CECO just popped today to $6 in after hours trading on a cash sale news announcement of their EU businesses that were only 8% of their rev. They get the cash from expected close before end of year, and with this $277M cash will put the cash level at about $7 per share, with no debt.
Rocky told me to tell you guys this was oversold, below cash and undervalued when at the mid $2 level.
That is my 100% + profit pop prediction on CECO even if I sell blindfolded tomorrow on short covering..
I surprised that the increased CMA involvement has led to GSL maintaining the current higher stock price for so long. I guess a lot of us are speculating on what it might lead to.
Who recommends no dividend on the conf call!? Everyone and their brother knows that equity values are highly supported by dividends in the shipping sector. The dividend is essential to value creation, then think about raising capital via equity issuance for growth at substantially higher stock prices. It's not rocket science. The decision to allocate 100% of free cash to ship purchases will have minimal effect on equity values for 2+ years, despite the 15% IRRs.
throw us a bone one time Ian! They have had all year to get this refi and still havent got anything to show for it. What else are they busy doing making sure the boats stay afloat?
In early 2011 GSL was trading from $6 - $7. On Feb 8, 2011 they filed a self registration. From the release - "The shelf registration allows GSL to sell shares, warrants or debt, in one or more offerings up to a total of $500 million." Many on this board thought GSL was preparing to recapitalze the business to aggressively and decisively return to a dividend paying model (some thought GSL should & would elect to grow the business instead by acquirng ships, which also would have been greeted well by the market I think). Ship appraisals were due for the LTV waiver everyone had been waitng on in Spring of that year, that could possibly get GSL back on sound footing and allow resumption of dividend. A little nudge from a small equity raise was considered by investors a possibility if needed to get over the LTV hump. There was a lot of promise. But the thing I remember most from that time was the incredible sinking feeling during a Quarterly conference call late that Spring in which everyone realized GSL was not going to take any action. The stock crashed that day. It kept on falling for a long time after, eventually going below $2 from a high over $7.
"I mean it is taking longer than we have hoped. Like it or not, and it can be frustrating, I am sure it's frustrating for you. It's frustrating for us, this process in dealing with banks. And it's not just us, I am sort of talking generically here. And certainly it's our experience in previous discussions with our bank group and any discussions that we might be having now. It's a methodical process. It's a dialog between us and our lenders. We think we have got great relationships. We have performed on the loan. We are a good borrower and now we are trying to leverage that relationship combined with an offer to them to achieve flexibility. So we have to start with the banks here. And as I say, it is methodical, it is extra tiff, and it simply takes time." - from Seeking Alfa Earnings Call Transcript in August 14, 2013
My point being - Ian and GSL are NOT dynamic in any way, shape or form. That is the mild version of what I think of Ian. But GSL does have a very solid platform from which to operate. Something positive will eventually happen here. If you have a whole lot of patience, I do believe it will pay off. But assume this will take a long time, and all the better if you get a pleasant surprise.
he didn't "recommend" no dividend, he simply said he would be in favor of creating value inside the company at IRRs 15%... at this point, who wouldn't be?? and fwiw, he owns a lot more stock than you, has since alost day one, and knows this company better than almost any of us. that is Edgetrader and he is allowed his opinion.
he would be in favor of creating value inside the company at IRRs 15%... at this point, who wouldn't be??
I think the short answer is, a lot of current shareholders appear to be in favor of "creating value" by issuing a dividend and thereby boosting the stock price instead of reinvesting at mid-teens IRRs. Finance 101 says that dividends don't create value, but this yield-driven market has not been particularly bothered by that theory.
I'm on the fence on the divs-vs-investment question. But if and when it comes time to make that call, I hope Ian doesn't try to split the difference and do both. IMO, If the strategy is growth, there should be no dividend; if the strategy is income, they should devote basically all free cash flow to dividends and not try to squeeze in a ship purchase or two. (FWIW, if the strategy is income, I'd also be in favor of a distribution-maximizing variable dividend that grows or shrinks based on FCFE, instead of trying to finesse a "stable" dividend rate). Trying to please everyone will more likely result in pleasing no one.
Very OT and very very late, but I just now got around to looking at how Lodgenet turned out (short answer: an absolute disaster). My question for any LNET followers who might still hang around this board: do any of you honestly think Colony Capital cut a good deal in their $80m recapitalization a year ago? The only ones who got wiped out were commmon and preferred shareholders, and they were pretty near bust at that point anyway. Debtholders are still scheduled to be paid 100 cents on the dollar, plus interest, no haircut. So for their $60m equity injection, Colony inherited every penny of the negative $185 million book value that existed pre-bankruptcy. And their new $20m revolver is now, at best, pari passu with the old debt. So without investing so much as an extra dollar, the old-money debtholders keep their first claim on the spoils from a successful turnaround while the new money is last in line. Unless Colony already owned all of the old term loan, how could they possibly see that as a smart deal?
And regardless of the financial engineering, it's also unclear to me how they turn LNET around. Sure, they can kill the next-generation set top box or whatever other strategic initiatives LNET was working on before they went bust. But LNET was hemmoraging money all over the place; just killing capex wouldn't stop the bloodletting. Or maybe Colony is a true believer: maybe they think that by spiffing up their offerings, LNET can become a moneymaker once again, despite the huge macro trends working against them? Again, I don't get it. Your thoughts are appreciated.