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National Bank of Greece S.A. Message Board

  • buchanan_1 buchanan_1 Oct 13, 2013 2:30 PM Flag

    Massive dilution is what’s keeping EPS and price down.

    On 10/7 “fastmoney” posted that, “The stock was $9 one day after the split . . . it can get back there. JMO"
    Krimhumhrim replied on 10/11, “definitely.”

    They are neglecting the massive dilution due to the recapitalization.

    NBG did not close at $9 one day after the r-split, it closed at 7.07 according to Yahoo Historical Prices. On 5/23 the last trading day before the 1 for 10 reverse stock split on 5/30, NBG closed at 1.22, so on the first trade day after the r-split it should have opened at 12.2. But it opened at 5.7 and closed at 7.07 for a 42% one day loss (vs 12.2) on close. It then declined gradually to 2.85 on 7/5, for a 77% loss (vs 12.2) in about 1 month.

    Both above posters are ignoring the fact the stock was diluted from 109M shares after the 5/30 r-split to 2,400M shares on 6/14 as announced by NBG -- a massive dilution factor of 22 (new shares started trading 6/27). That massive dilution is what’s keeping the EPS and price down and will prevent if from returning to its pre-dilution share price any time soon.

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    • Didn't know about this massive dilution. Hopefully Paulson wasn't selling after his pump.

    • what's holding down the PPS is the write down of their bond holdings when they are again brought back to par the PPS will go up accordingly, this is a bet on the Greek economy

      Sentiment: Buy

      • 2 Replies to wyoste
      • PM Samaras said selling bonds next year will sound the “all clear” to foreign investors since Greece has been shut out of bond markets since March 2010. However, if the ratings on the bonds fall below Moody's A3 rating, they are disqualified as sufficient collateral to borrow from the ECB at sub-one-percent rates.

      • "what's holding down the PPS is the write down of their bond holdings"
        Are you referring to their holdings of "GGBs" (Greek Gov. Bonds)? I'm sure you well know that their GGBs were "called" by the gov't during the "Private Sector Initiative" (PSI) in the spring of 2012. The original bonds were replaced with "new GGBs." Face amounts & coupon rates were cut drastically & maturities were extended. That so reduced this bank's bank's cap reserves that the bank required €9.756B of new capital from the HFSF. More than 2 BILLION new shares were issued to the fund in exchange for the new cap. Most (all?) of those new shs are still in the hands of the HFSF. I believe the fund is the bank's majority owner to the extent of c. 89.2% of the bank's O/S shares. The "new" bonds which were issued in the PSI as replacements of the original GGBs had sharply declined in mkt value by late in 2012 when the gov't bought back most of the few GGBs which were still outstanding, far below par, at the urging of the IMF. The banks did report some profit on that buy-back, but maybe only relative to the last price to which they'd already marked the securities down. How many "bond holdings" do the systemic Greek banks have now? I believe I heard Petros Christodoulou say in a conf. call earlier this year that they had few GGBs left. (Transcripts of some but not all calls are available at Seeking Alpha; the 3-27-13 call's NOT included.) Christodoulou did say about NBG's participation in the sovereign debt buyback at the start of the 12-21-12 call that "NBG participated in full, tendering €4.4 B of new GGBs." In that same call Paul Mylonas referred to "impairments" & said " the new GGBs were marked down to about just below €0.25." The first 6-mo exercise of warrants on the HFSF shs will occur on or c. 12-27-13, & again every 6 mos thereafter, until 54 mos after 6-27-13. What will be the effect of that new supply on the market from the HFSF's "vault"?