If you read the Nomura comment it is not at all bad !
1. this analyst remains neutral with the same price target
2. he thinks they will get the debt covenant relief
3. they are already looking at alternative financing
4.also this news/his comments were out on monday morning
5. 1000 day traders shorting 1000 shares will pump up the short interest
6. they think they cannot lose and that is always the time that they will
s investors remain concerned with the company’s current balance sheet and free cash flow, the firm has reiterated a “Neutral” rating and $13 price target on WLT. The price target suggests a 15% increase from the stock’s current price of $11.10.
Analyst Curt Woodworth believes that the company will be taking action to address investor concerns in the next couple months.
Woodworth noted, “in the short run, we expect Walter will significantly reduce capital spending by an additional ~$40-50mm to bare bones levels and now forecast the dividend to be suspended at the upcoming board meeting in July, saving an additional $31mm. We expect WLT to begin to turn its stranded inventory at Brule into cash over the next several quarters via reduced mine production,” the analyst comments. These steps will allow the company to achieve covenant relief in the short run, the analyst said, and they believe the company is likely to look again at alternatives to restructure / refinance term loan A sooner rather than later.”
Lots of wishful thinking there. The real problem is BHP's new deal yesterday setting up to undersell Walter. Walter will have to go below $140/ton for met coal in Q3 to beat out BHP, and they will loose their #$%$ trying.
Keep pumping though, I see you have a few idiots to believe you even though this stock lost another 12%. There is no bottom here, just endless losses.
I liked picker's theory but what looks like happened is:
1)mgt bought at 17$ to let investors know they are behind and bullish on the company bc they were going to go get refinaincing
2) when they went to look for finanicing it was not favorable and one of the hicups were the current lender conenants....
3) before they would address the conenant issue the news leaked out and took the PPS down
4) Now they are going to suspend dividend to help with cash and covenant relief
5) Now they will look for refininacing
So as of now... the shorts do not seem scared enough to cover and are bettting WLT won't get the refinancing.
If WLT can come out with the refinining, then we may see a pop in the pps bc shorts witll cover. The thing the shorts should consider is: If WLT was told that the conenants were the issue and WLT is now taking care of that issue with suspension of dividend, then they should really think about covering at this level bc all the bad news is baked in....