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Penn West Petroleum Ltd. Message Board

  • marginofsafety501 marginofsafety501 Jul 30, 2014 5:07 PM Flag

    FS Restatement points to pervasive underlying issues

    As a long term holder of PWE and a CPA this is horrific news.

    I have stayed long with PWE up until today. The discount to B/V and liquidity value has provided the investor with a seemingly incredible opportunity. This is not just simply an "accounting issue." An executive team does not cook the books unless there is some major issue with the company. Why would a strong company take this risk or even a company that is just having some management issues? Companies only cook the books in order to avoid some kind of a compounding loss, potentially having to pay a debt that will come due if they miss their numbers which will cause a sequence compounding issues.

    This is not a take out target any time soon because no company would ever invest in a company that they have no idea what their numbers actually are. In my opinion there are only 2 outcomes from here, a continued sell off because there is going to be no positive news regarding this company anytime soon... for example "Actually we made a mistake, there is no accounting issue and we are doing great financially," and in all likelihood an organized bankruptcy.

    I have sold all of my shares as of today and put the proceeds to work buying puts with an expiration date of 1/17/15.

    Sentiment: Strong Sell

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PWE
1.38+0.07(+5.34%)Jul 30 4:02 PMEDT