I've just seen the Form 4 that was filed on edgar yesterday and it reflected that Sellers Capital sold 288.5k shares since 26th Feb. Unfortunately for all you bulls, if they are selling everything to meet redemptions, they still have another 2.4m shares to sell. Since the Fund was the biggest holder and promoter of the stock at VIC etc, they know better than anyone else the per share value metrics. Unfortunately that doesn't matter because after the poor performance last year and fear of hedge funds, clients probably want out and they couldn't give a hoot about the price per mcf.
Remember we are in a bear market where valuations count for nothing and no-one knows where this will end. in MCF, you have a company where 1 guy is the CEO, CFO and Chairman. He has no contract with the company (someone explain why), the company has no internal engineering skills and they don't have a written contract with the company who provides thes services (again please explain why). they have only a fraction of their market cap in cash and if they want to survive the natgas trough, they better treat it carefully. they are earning no money at these gas prices and the biggest shareholder is selling. The only thing you bulls can cling to is implied price per mcf. Didn't Aubrey at CHK and all his promoters teach us that in a bear market that counts for nothing. Yes I'm short because there are just too many red flags for this kind of market.
well, the current bear is the opposite of the bull of the past 2 decades. throw a dart on any stock, chances are 99% it will go down. No big deal. That being said, there are stocks that will recover and virtually shoot u into the skly once the selling prwssure subsides and the forced sellings and liquidations end. MCF will be one of those because it is a stock where you buy a dollar for just 75 cents AND that dollar that you buy for 75 cents can easily turn out to be a 2- or 5-dollar note a couple years down the road. huge upside, limited downside (from a valuation point of view - the stock market of course can drag the stock price down by another 50% easily. which would be great, btw, as I would buy more hand over fist and sell other stuff to buy more mcf
he has been leaning on this stock for the whole month most likely due to redemptions in his fund. hopefully the buyback can help him out to mitigate the decline. The fact still remains that the reserves are cheap and getting cheaper everyday the stock drops.
Even if Seller's is facing redemption problems, 2 mil shares @ 34 just about completes the authorized $100 mil buyback if the company could take it in here. What better way to use the $50 mi credit facility and with aproximately $10 mil of cash flow a month being generated, "buying back the common stock is better than using the drill bit"
You should short a whole lot more of it....surely MCF is a much better short than CHK which is head over heals in debt. Personally I am a buyer at these levels, MCF will generate more cash per share than any company I know of in hard economic times. Even if nat. gas goes to $2.50 they will be OK....large cash postion and a positive cash flow..... Nevertheless, I think you can make good money shorting anything right now. Best wishes to all the shareholders and you too!