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Seaspan Corporation Message Board

  • jdfunnell@sbcglobal.net jdfunnell Aug 7, 2007 12:51 AM Flag

    I think this was about a Margin Call

    We all know this market is roiling and leveraged players are being asked to put up additional margin. If you don't have cash and you need to put up more margin, ya gotta sell something.

    And I think one of the big holders of Seaspan, today, had to answer a north-of-10 million margin call. That's why, in my view, north of 450,000 shares traded at about $29.

    Who bought? I think it was the Market Maker, because there was not enough demand in the market to sell that quantity otherwise.

    So the Market Maker on the floor of the NYSE coughed up circa 12 mil in its role as the buyer of last resort.

    And what did that MM do with the new inventory? Ninety minutes later, sold it at $29.40 (look at the tape) and made a cool $175,000 or so on the trade.

    Not bad for 90 minutes work.

    Personally, we were down circa 30K today on SSW. That's not fun to look at, but we own this as an income investment and the income piece did not change today.

    The stock price only matters to us in 2011, when we think the price is $70-85, which is when we will sell, reaping 10+ years in dividends in the Cap Gain in one fell swoop.................Dave

    P.S. Gerry's gotta come up with another used ship deal, because there are no newbulidings deliveries in the next year.

    P.P.S. The Morningstar piece was bullish for SSW.

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    • what makes you believe ssw is worth 110% more in 4 years. thanks...and hello

      • 2 Replies to buyfrysell
      • jdfunnell@sbcglobal.net jdfunnell Sep 13, 2007 7:21 PM Flag

        Took me a while to find your question..........and hello.

        It's actually a pretty simple calculation. If a 23-vessel fleet will support a $1.70 dividend, what will a 100-vessel fleet support, even considering the big cut for management as the dividend rises? My answer, probably low, is $5. And what will the market want as a dividend yield? If the market wants that $5 to be 7%, this is a $71 stock. If 6% is the market yield, it's $83. I doubt the market would settle for a 5% yield, so I don't see this going to $100.

        I came up with a very simple epiphany in January (some would call it simplistic, and I'd probably agree): Seaspan is going to go up, on average, a buck a month for the next 4 years. I even set up a spreadsheet to track it. Through the end of August, it has yet to be below the monthly target................Dave

      • If Wang has his way it will be a lot sooner than 4 years.
        This guy is driven, has a clear vision, a passion, and lot's of connections.
        Read about this company. Read about the man sailing it. You will be impressed. There is no BS. Risk is very well managed. And it is very simple to understand.

        Check out the Seaspan website. Make sure you don't get the Tugboat one. Also, watch the video that the Discovery Channel made about their boats. IT is all good and simple stuff.

    • Thanks for one of the more rational explanations. The only other serious explanation, since high yielding MLPs were also slaughtered was the yen carry trade, borrow at 1%, invest in high yielding U.S. securities. Yen goes up, strategies must be unwound.

 
SSW
18.76-0.24(-1.26%)Dec 19 4:02 PMEST

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