If you have spent the past few days - running around like Henny Penny and telling yourself the "Sky is falling" Please stop. The sky is not falling.
The best course of action for those who think the sky is falling is to reread the news release and looking at the details before you sell on Tuesday and hit the so called exit.
If you reread the news release you will see the sky is still right where it always has been.
For the Henny Penny's out there, what we are seeing here with the Deptartment of Justice (DOJ) is a simple request for additional information. That's it. This request is what I call part of the process to getting the deal done with Amerene. (Nothing more - Nothing less.)
However, if you feel the need to sell your AES shares on Tuesday, so be it. I am sure that many of us and the good people over at Ameren will be more than happy to buy your Aes shares.
As far as myself goes, nothing would make me more happier than to get rid of weak speculators in this stock. Aes is in my book on the mends and will regain what it has lost over the past months in share value.
Don't forget, Ameren just might want to buyout the company all together. All it takes is a little more ink on the paper and it would be done just like that.
Good luck people and for those of you who sell on Tuesday - well, all I can say is, again, thank-you.
PS. One might want to buy the Febuary $5.00 calls. I know I have.
The stock is still a splendid speculation stock with a lot of upside growth - yet to happen.
The sky is not falling because of DOJ but it is falling because of the market and AES being over valued compared to other energy companies. When MIR is around $3.75, DYN around $2 and WMB around $3 then AES should be lower than $3. Now that the bad newses are coming left and right, then AES may break its support levels and heading to lower levels.
By the way, I'm not short on AES and I really feel bad for longs who bought recently. I hope AES can pass Tuesday with not that much drop. Tuesday will be a test for AES to prove itself. If AES can stand the pressure and stays above $2.70, then it deserves a consideration.
You seem to be mixing your companies a bit with your valuations. MIR, ILA, WMB, DYN are all in (or just got out of) the energy trading business. Because of this there are potential bombs in the capital structure. Their valuation thus reflects this. AES does not do trading. There may/may not be bombs around but they are much more out in the open. Its valuation reflects this also.
It is an open question as to how much these companies will make from trading/risk management in the future. The exception is ILA of course who decided to get out of the biz all together. This uncertainty as to future earnings further distorts the multiples that these stocks command. I agree that at 2X earnings, MIR is undervalued. However, it is taking things a bit too far to say that AES has to drop from 2.5X earnings to 2X earnings for this reason. MIR and DYN also have the problem of books that need to get certified. A problem AES does not have.
Overall, I think that MIR and AES are the best of breed down here, but they are different companies doing different things. They need not be valued exactly the same.
short, you also bring up a good point about DYN, MIR, & WMB.... the mkt has really taken them all down (plus ILA) lately. I'm beginning to get pretty discouraged because these bounces aren't holding....I've made some decent $$, but seem to get caught in the downdraft too often, and it's likely that I'll get another haircut Tues IMO.