The most recent figures I can find show almost 22 million shares short in November. Some of those have probably already covered by now. To put that in perspective there are only about 82 million shares outstanding in the firm.
I'm not quite sure what to make of these figures. There probably won't be any news from management until after mid January when the dividends for the next three months will be announced. A cut or even the elimination of the dividend is a real possibility.
The big question is about the recent $9 million write off. Is it a one time thing or is there more of the same coming?
I sold mine after the initial collapse to the $6 range. I guess I made the right decision. nevertheless, i'm shocked at a drop to under $4. It is rare for a stock to drop from $14 to $4 in a month. The reported news is not 'that bad'.
There must be some fraud in this company to warrant this type of performance in an otherwise stagnant market. A dividend cut cannot be the reason. Maybe sales and/or profits have been totally faked for some time? Someone who owns a lot of shares knows something and continues to bail out.
Well, someone who knows a lot more about the company than all of us is the Exec VP Kostelecky. And he just bought 125,000 shares at a bit over $5. That's 600K out of his pocket to buy what he thinks is a cheap stock. That is the ONLY reason he would have bought.
Perhaps the deep dive is related to the lack of clarity about the company at this time. The market hates uncertaintly. There is uncertaintly about accounts receivable (they responded by beefing up their accounting staff), and, as beauzeau posted, whether there will be continued write offs for uncollectable accounts or if they swept out all the bad accounts with the last dissapointing quarterly report.
Also, as this is a dividend stock, there is uncertainty as to whether the current dividend rate will be continued, reduced, or fully eliminated. It is worth noting that not long ago management was contemplating actually raising the dividend rate. I would think a full elimination of the dividend would be a very low probability and that the executives that set the dividend rate did so knowing that there would be short term cyclical slowdowns in the business and that the dividend rate must be set at a rate that could accommodate such cylical slowdowns without the dividend rate needing to be reduced or eliminated.
What we know is that the company has acknowledged that the business is subject to some cyclical slowing forces as well, and this was evident in the last quarter's report and commentary from management.
So the questions seem to be: Will accounts receivable continue to be problematic, or will management state that they have eliminated these problems for the foreseeable future?
How long will the cyclical slowdown persist? (I think it is acknowledged that in the long term the growth in fracking will be on a significantly higher trajectory).
And lastly--What will happen to the dividend, as this is a large attraction to the stock for income hunters.
On that note, I bought additional shares as the price has plunged to lower my cost basis. My thought is that even if the dividend is cut in half I will still have a terrific average dividend yield on my invested dollars.
I don't think such an IMPORTANT person at Poseiden such as Exec. VP Kostelecky (you can read about his history and responsibility at Poseiden's website) would have bought $600,000 of this company with his hard earned cash if there was a catastrophe in the making here such as a fraud or other big negative surprise.
I also think that this group guys at Poseiden sold off Open Range, the exploration and drilling side of the business, and they have all assembled now at Poseiden for a reason. I think that reason must be that they must see a very bright future, or else they would not have stacked their chips on the Poseiden side of the table.
The next quarterly earnings call/commentary will be very important. Management can clear up A LOT of the uncertaintly surrounding the stock in regard to the many questions I have raised. The removal of uncertainty will help the stock, especially if the company updates that the dividend will remain, the accounts receivable problem was dealt with and is in the past and things look clearly better going forward, and that the cyclical forces causing the slowdown will be temporary and that the long term remains bright.
Further stock purchases of significant size by other IMPORTANT Poseiden corporate insiders will also deliver perhaps the best message to the market-- and that is that the stock is cheap and should be bought!