So the way I see it based on the 2011 income statement from yahoo, someone can come in and acquire this thing for say a 35% premium from current levels, fold it into their operation (generate G&A synergies) and likley recoup their investment in around 3 years with the rest being gravy. Am I missing something or does this look like a no-brainer?? Comments appreciated. Full disclosure, I am long.
In all past years, the operating margins take a turn for the worst and even go negative for a quarter or two.
the bankers dont like unreliable cash flow and wont value what its worth, or fund loans against it.
But your not missing anything.
I'm long and buying calls. Made money on 40 calls earlier this year, and expect to plow the same ground again successfully. the company just gets more cash rich every day, with no meaningful investments in progress.
i dont think this giant would go for 35% premium. 50% to 75% maybe . it will still bring in nice earnings. oil is a slippery commodity.non predicable.it lost $18 a wti barrel in two weeks .it could make it back just as fast if the politics of region(m.e)change and inventories slip. with the china stimulus in play ,who knows what can happen.