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Walter Energy, Inc. Common Stoc Message Board

  • picker.bottom picker.bottom Jun 17, 2013 1:13 PM Flag

    Is this the management's real plan?

    This might sound like a ridiculous conspiracy theory, but think about it for a second...

    The management did hold on to their board. But, Institutions own more than 100% of the float making them absolutely vulnerable. I suspect that they are working behind the scenes with one or more financial institutions to secure funding to take it private. But, first they have get back the shares from the current share holders and what better way to create capitulation than uncertainty. File a 8K stating the intent to refinance and then revoke it with in 7 business days, while the big money is dumping today, somebody could be acquiring those shares to obtain a clear majority that will help them taking it private. 42 M shares traded in 2 sessions (total float is 62 M) and granted that 10%-20% might be intra-day day trades, but who is buying up the rest of the float (Sure shorts are covering as well) and why?

    If they succeed with this plan, depending on number of institutions involved they will be forced to file a 13 D soon. Again, this is just a speculation theory and would be one reason for the management to stay quiet.

    Today's action:
    52 % Buys
    40% Sells
    8% Transactions were in between.

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    • I don't see a possible 13D filing in the near future (Only exception could be a transaction based on June 26th, Deadline = July 5th) I don't expect it to happen or give it

    • If this is true, will the stock price go to 0 then?

    • After today, I don't think any 13D filings can be expected.

      But, 13G filings are due by July 10th (If anybody exceeded 10% ownership)
      Also, July-10th the new short interest (As of June 30th, 2013) will be released.

      • 1 Reply to picker.bottom
      • No 13 D filed event today. At this point you can probably rule any activist investor involvement (At least nobody crossed 5% threshold as of June 18th)

        June 14th, 17th & 18th were the big volume days.

        Will just have to wait and see if any 13G filings come out on/before July-10th (required if the acquirer crosses 10% threshold by end of June)

    • I would look for 13D filing(s) in this week.

      If the acquiring Entity exceeded 5% threshold on

      Jun-17th, 2013 then Deadline to file = June 27th, 2013

      Jun-18th, 2013 then Deadline to file = June 28th, 2013

      either way, this week should be interesting...

      Of course, these nifty WS crooks might find a way to go with a 13G (Under some special conditions such as QII, Exempt or Passive Investor) and that will enable them to stay of the radar (By not disclosing their stake & intentions) for longer.

      If the acquiring Entity exceeded 10% threshold by EOM (June 28th, 2013) then they have to report it by July-10th, 2013.

      Bottom Line:
      They can run, but can't hide... Somebody has to come clean and declare their stake. The shares did not vanish in to thin air!!!

      Other factors:

      SI for the period June 1st -14th will be out today after 4PM. But, the more important SI number will be the period ending Jun 28th, 2013 which will be out on July 10th, 2013 (Same deadline as for 13G)

    • Just looked in some more background of "Michael T. Tokarz" (Somebody on this board posted about his "The Tokarz Group Advisers")

      Mr. Tokarz is a senior investment professional with over 30 years of lending and investment experience. Prior to assuming his position as Chairman and Portfolio Head of MVC Capital (NYSE:MVC), and prior to founding The Tokarz Group (in 2002), a private merchant bank of which he is Chairman, Mr. Tokarz was a General Partner with Kohlberg Kravis Roberts & Co. (“KKR”), one of the world’s most experienced private equity firms. During his 18-year tenure at KKR, he participated in diverse leveraged buyouts, financings, restructurings and dispositions. Mr. Tokarz currently serves as Chairman of Walter Energy, Inc.

      At the MC of 663 M and assets of over 3 B, I'm more inclined towards the company going private with a TO for the rest of the shares. I've more conviction about privatization than a week ago when I originally posted this. This is only logical explanation of why the company's management has been so silent about the falling PPS.

      Hypothetical Scenario:
      If they manage to gobble up 50%-60% of the float @ an avg of $13 (Costing them $405 M) and they can offer $35 (Costing them $1.1 B) for the rest of the shares and basically taking the whole company private for $1.5 B. They will issue stake in the new company for the debt holders and even finance the old debt or do whatever with it.

    • These purchases were essentially forward looking statements so we should not be taking them seriously.

    • Held up ok today when everything else in this space was taken apart. Actually, CLF held out pretty well too.

    • Will a 13 D come out soon? Who gobbled up a significant amount of the float?

    • another theory would be, that they received interest from a party about taking them over, reason for cancelling there financial refinancing . Management has been working on this quietly behind scenes, reason for adding shares recently??? All speculation.

      • 1 Reply to scienceinvestments101
      • There is big difference between a Buyout and taking a company private.

        It really depends more on market conditions/fundamentals and the current profitability of the business, not to mention demand/supply.

        The company/board really feels the company is under-valued and some investors have shown interest in taking it private and strengthen the company before becoming public again. Also, the management gets to keep their current jobs. Of course! this requires some serious financial backing up and the confidence that MET coal will be back bigger and stronger... In theory, the larger # of shares they gobble up the more they can offer to get the remaining shares. With the kind of free money floating around... it wouldn't be too much of a stretch.

        I'm more inclined toward a TO to go private rather than a buyout by another company.

    • Well, to take a public company private the acquiring entity or entities have to acquire all the outstanding shares. The general idea is to acquire as many shares as possible via open market or some private transaction with major share holders and then make a tender offer to the remaining shares that were not acquired.

      Ex: WLT has 62.6 M shares outstanding, and say some entity acquired 50% of it (31.3 M shares) at an average price of $13, in the last 3 trading days (Cost of 406 M). If the entity had a total budget of 2B to take WLT private then they have 1.6 B to offer for the remaining 31.3 M shares which would put the tender offer at around $51 a share (I think any TO north of $35-$40 will be gladly accepted by the current SH, my assumption is that the longs from $140-$30 are prob. wiped out or averaged down to lower levels)

      FYI, I'm using 50% float and 2B budget as hypothetical numbers

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