Reply to Foo: NM's problem, as I see it, is that the cash sits at NM while the juiciest opptys are at NNA and NSALI. NM has ample growth opptys in dry with all the purchase options they have but that doesn't seem all that compelling to me. I'd be disappointed to see cash going deeper into the owned dry fleet. I'd sink the cash into NNA, but they have to find partners to go along, they can't increase stakes in NNA alone. The party line one year ago was that there weren't transformative deals out there, just 1-3 vessel deals (like Buddy and Bell). Since then though the banks have taken over Torm, and likely some others, i.e. Nordic appears to be on the brink. So I surmise that there are big deals out there at the right price and this is the kind of deal that is more likely to be in Angeliki's wheelhouse. The complicating factor is figuring out to what extent NNA buys into the eco craze like STNG. I suspect that for Angeliki, the right financing deal trumps the eco benefits. If she can get both, great. So I still think a convertible deal like SFL pulled off is a great fit and NM can use it's balance sheet and NNA stake to grease the skids. NM should enhance value as best it can and keep it's eye on the big prize which is shedding its conglomerate discount, rather than trying to grow its dry fleet for it's own sake. I suspect NMM's offering today will be followed in short order by a drop down from NM and then something creative is done focused on NNA or NSALI.
That's three sell-side scores (JPM, Sidoti, and DB) recently, but the $5 price target from Yagerman really is the killer part of this. This is good, they've need a spark after STNG hogging the spotlight as of late.
They still need to work on the float. Assuming our good buddy Larry isn't going to be trading his shares, roughly two-thirds of the shares are now out of play (add in my whopping holdings to that b/c I ain't selling). This will add some scarcity value in the short run as the sentiment turns bullish, but in the long run, this stock now has even less institutional appeal - it's basically Angeliki's, Larry's, and and a few others' (including pdnnyc) private little tanker company. If you look at the deal that SFL just pulled off, a convertible note where Big John F greased the skids by lending a chunk of his shares out to facilitate hedging - this exactly the type of deal that NNA needs to pull off. Let's hope AF&Co. are paying close attention.