It can't hurt anything. This is what I am writing to headqaurters. Whether anyone important reads it or not, who knows???
To Whom It May Concern: Please see that this gets to the CEO - Mr. Whiting, The President and COO - Mr.Vining, and the Board of Directors.
Unfortunately, Patriot Coals' performance since the spinoff from Peabody had been dismal. Four consecutive QTRs of losses and earnings’ estimates miss. Although revenues continue to increase, the stock PPS has suffered dramatically. Although most coal companies have taken a hit with the economic downturn, many still were able to post decent or even strong earnings. Many coal companies seemed to have “bottomed” awhile back and are starting to recover shareholder value in the stock prices. Patriot Coal seems to be broken and still testing 52 week lows. Even the conference calls are like informal conversations to pass general information/knowledge.
I am very concerned for my investment here and I understand that representatives from PCX met with ICVL to discuss buyout/entity options. I urge management to seriously consider a buyout. $15.00/share or even a little less would be better than bankruptcy. Please consider selling the company and spare shareholders9the actual owners of the company) any more disappointment and losses. We all have our pride and dignity. But being a good leader means putting egos aside and doing what is best for all. The best interest here for all involved would be for management to sell the company.
to me it is not that bad cost control but market negotiation technique.
let's discuss on the 2009 earning. say if as in report the priced coal for 2009 is
22m ton in appal. at cost of $58/ton
6m ton in illi. $35/ton
4.5m ton appal. met $58/ton
if the sale price is as priced: $58/ton for appal. thermal, $38/ton for illi. thermal and $100/ton for met.
then most earning generated is from met and the thermal coal contribute less even if they reduce the cost due to low production. the price of met may not be that high. but remember the guidiance for 2010 met is still about $86, so that PCX still can make well over $2 per share in 2009.
Those met contract price reductions as well as the deferred/canceled buys really hurt PCX int eh 4th QTR. Then management cut contract prices.
The alarming thing here is that revenues beat estimates and they still loss .82c a share. Thats poor cost control, poor managemnt.
I wish I had gotten short but I am buttom up in this like most. I thought PCX was undervalued and maybe it is, but their is just nothing positive to hang your hat on with this thing. All the other coals except PCX and MEE beat earnings.
The fact is that I have never shorted a stock in my like.
The performance speaks for itself. This compnay is broken. No other major coal compnay has all the issues PCX has. An d then they go and lower prices when they already cant turn a profit. I have ZERo faith in this managment team. A buyout of $15.00 would give me a nice profit.
I was actually thinking they would announce the news at earnings.