Every amazing company has it's hiccups. Panera hasn't even started. It will be a 50 Billion Market Cap in ten years.
I think it is largely based on the fact that CJ forecasted struggles ahead. Most investors have short term horizons and aren't willing to wait a year for a business to turn around. If you are a person who is intelligent and has patience you will be paid off handsomely in a two to three year time frame.
One thing that drives me crazy is people inferring value based on the stock price. The current market price is based mainly on fear, greed and psychology not on reality or the true worth of a company.
It's kind of difficult to wrap the head around who benefits from the reduction in cash because Nabors is going to be CJ's largest shareholder. I do know the reduction in cash and stock price is a win win for people buying the stock at today's prices. So that in theory should make it a win for Nabors as well
I'm glad to hear that they are still planning on going ahead with the deal. It's a win win for both companies because CJ is so much more efficient than Nabors when it comes to drilling and services. It looks like CJ is going to save over a billion dollars from the original offer which is great ! Long term this is an amazing once in a lifetime opportunity to buy a great growth company at a fire sale price.
I would imagine the transaction could be in jeopardy if C&J cannot secure funding for the cash part of the transaction.
I wish I could answer your question. My brain turns to sill putty when I read 8-K forms. I can't understand them to save my life. Hope someone who has knowledge can answer your question soon !
An expert from CJES 2013 annual report "With respect to our international expansion efforts, during 2013 we established a presence in the
Middle East and positioned ourselves to capitalize on opportunities that may arise in the region. We
opened our first international office in Dubai, where we are assembling a team of sales, operational and
administrative personnel, and established relationships with partners in targeted countries. During 2014,
we expect to commence construction of an operational facility in Dubai to support our anticipated future
Middle East operations. We were recently awarded our first contract to provide coiled tubing services on
a trial basis in Saudi Arabia and we are shipping equipment to the region with operations expected to
commence during the second quarter of 2014. Due to the size of this first project and the additional costs
associated with establishing operations overseas, we do not expect to generate financial returns during
this initial phase. Additionally, there is no guarantee that we will be able to obtain additional work with
this customer beyond this provisional contract. However, we believe that this is a valuable opportunity to
demonstrate our services outside of the United States. We are optimistic that our efforts can lead to a
long-term relationship as we strive to establish ourselves as a provider of multiple services to this new
customer. We also hope that by demonstrating our capabilities in the region we may be able to secure
additional opportunities with other customers in the Middle East."
Honestly no one knows what will happen. I do know Americans companies are great at adapting and changing and working hard to overcome adversity. Don't count this one out. Not by a long shot.
I think the selling is way over done. CJ&S is a great little company that is still run by it's founder and it is very well managed.
The company has amazing growth potential and I believe the company is still worth just shy of $30.00 a share. Back in 2012 I bought CJES for a $18.00 a share and I think they had more uncertainty than they do now ! I was fortunate to sell at $30.00 after I felt the stock was fully valued. I just look at this as a rare gift to buy a great company at half price.
One thing that Warren Buffet and his professor Benjamin Graham teach us is that the market is often times irrational. This is one of those times IMHO.
It's going to be hard to find a bidder that is going to pay more than that now. Plus the Nabors deal has tax benefits that will be hard to match.
there is only one stock I bought that actually went bankrupt and lost all. On that particular stocks I thought the odds were 50/50 so I put 3,000 dollars on it. My feeling was if I lost it all I could write off the 3,000 on taxes. If the company survived there was unlimited upside. I lost that bet and would probably never do it again. Unfortunately, I made so much more than I lost that year that I ended up paying capital gains taxes anyway :)
It is better to buy stock when it is cheap than when it is expensive. If you wait for oil to stabilize and go higher (which it will) you will be too late to the dance. Grow a pair and make some money fools