I could be wrong but I don't see any big pop in the pps until they can become profitable. The restructuring is going to take at least a year or more especially considering the new CEO will have to fight with the socialist thinking BOD to make the necessary cuts. In the end I think there will be a huge payoff for those willing to wait it out. I will continue to accumulate on the dips and wait and hope the turnaround will be successful. Good luck longs.
The MMs can play this manipulation game for years to come, or until ALU is dead. The only
way this stock price is going up is if the MMs let it. Remember folks, do what the big boys
do and you might just make a little money.
It seems the default accusation by anyone who owns a stock that does not go up is MM manipulation, which is absurd.
One need only look at the last 6 years of performance at ALU to know why the stock remains depressed. ALU is beset with a host of challenging INTERNAL problems, as well as EXTERNAL factors like the economy in Europe and Chinese competition. There is little stomach to buy into a company that cannot show a profit except for one-off events (asset sales) and at 4Q, which usually benefits from strong end-of-year CAPEX spending.
Yes, ALU does have the Goldman loan. But what is that loan, exactly? Simply put, it is the cash needed to restructure, plus the cash needed to pay for operational losses until the restructuring results in profits (if that happens), plus the cash needed to pay down some debt that comes due in 2013, 2014, and maybe 2015. So it is an OPPORTUNITY only, not a GUARANTEE of restructuring success.
The loan resulted in two types of bonds; one due in about 3 1/2 years, and the other in 6 years (I think). This structure is designed to give the company breathing space to turn the company around. But the bonds that come due in 2014, 2014, and 2015 are not going away and must be either paid off, refinanced, or some combination thereof. I think the CFO made it clear at the 4Q CC or in a subsequent interview, though he did not offer dollar specifics, that the company would pay down some part of those bond debts coming due in those years. Significant chunks of the near term debt will probably be paid off, and the rest refinanced.
Importantly, the Goldman cash will likely be exhausted in about 2 years.
So understandably, given factors of economy and Chinese competition, as well as the restructuring history of the company, investors and analysts are leery of ALU claims for the 2013 restructuring; and of the company's ability to stop burning cash and become consistently profitable once again.
On 4/2 ALU will talk about their revolutionary SDN which is another answer to facilitating cloud computing.Keep in mind that cost cutting did not start yesterday.It has been a WIP.As mentioned earlier by me,markets are not efficient because a lot of money is sitting on the sideline saying "show me..I have been fooled too many times".IMO,the analysts will miss the mark by several cents.Remember CAPEX spending will be exploding now and over the next several years.
Bottom line the MM's can only manipulate when there is doubt.When doubt is changed to certainty,money will come off the sidelines