"just hope it's good for the stock price"
The only reason it is trading at 18 cents, with most of the shorts holding, is because of the slim possibility of one or more of the creditors calling in their debt before the deadline (currently around end of the year) or COCO not finding any suitable buyers before the deadline. Then COCO will have to file BK if the DE does not help at all. Lots of IFs and very low probability since the govt is involved as well as the careers of 80K people. Once the first sale is announced, BK probability falls below 1% and the shorts will start scrambling to take profits. And the MMs will take full advantage by letting the ASK go and forcing short covering at any price the sellers ask. BTW, even if they file BK, this will run to the 30s on short covering alone. So, although the shorts may get a small window to cover below 13 cents (if they file BK), it will fly past the current price very quickly. So, I will take the 30s or a buck depending on the outcome and the probability favors the latter...
Just looking for one of these to make my fantasy a reality.
1) COCO announces the transaction details for their Canadian school system and gets a fair deal like CECO's European school sale.
2) COCO follows it up with sales of their 3 divisions in the US.
3) EDMC (which is flying after the merger rumor with COCO was reported on NASDAQ website) proposes a deal with COCO. It does not have to be approved right away or at all. But that shouldn't stop them from testing the waters.
4) DE can't find any incriminating evidence from all the requested documents and back off a little on their current aggressive stance. Drops some or all lawsuits before they are thrown out by the judge.
5) DE lowers bar for sale (fewer campuses)
6) COCO announces new source of funding
7) COCO announces that it will continue to operate as a smaller school after the sale. 107 - 85 -12 = 10 schools left.
8) 24M short shares looking to get out of a narrow door allowing only 1-2M shares daily with 30+MM shares held by institutions and most retail out.
If nothing else, just reason #8 alone will do the trick. Please keep holding short...
I think he is referring to the Forbes article dated Jul 31, "Corinthian Colleges: Chameleon Carrier Of For-Profit Education?". Here's the quote:
"For starters, Corinthian’s 14-college Ontario, Canada division is considering offers by various suitors. According to Everest Colleges Canada president Rupert Altschuler, it’s “business as usual,” despite Corinthian’s announcement that it will sell its Canadian campuses.
“The entire plan is to sell the Canadian division as an ongoing enterprise,” said Altschuler. “We are still accepting new students, of course, and we continue to teach all the existing students.” Altschuler said that many stakeholders have already expressed “healthy interest” in the Canadian division."
Does a ruthless 50% take down of a company on just $100K in trading volume constitute a sham company? They hired industry experts, bought several mines, conducted test drills, increased production, are profitable, decided to profit share vs dilute the shareholders and are reporting to the SEC. Where do you see the scam in all this other than MMs playing a low float nano-cap? But I do agree that they need to do something about this ridiculous valuation...
Though I agree with you on your target and their PE is only around 2, that is not what is going to get this to the 80s. There are much bigger catalysts waiting to unfold and the gun powder is ready to be lit (shorts not knowing on which event(s) to cover). But you need to exercise a lot of patience to see those gains. I am willing to wait till Dec though I don't mind a resolution sooner :)...
Let the juvenile at TMUS rant and rave on Twitter. Sprint can be a class act while bringing the hammer on Legere. TMUS is already bleeding at $80 per month. Where is the money going to come from to support that "overpriced" unlimited data plan? There is a new sheriff in town and his face "looks like a bandit!". And he has a Godfather sending in stacks of cash from Tokyo to keep the engine revving. And best of all, he does not have to behave like a jerk to succeed!
And look how fast they moved over the past 2 weeks! They first tell Legere to get lost - thank God. Then they let Ol' man Hesse go and bring in a self-made billionaire entrepreneur. And the week after, they are slashing prices to the bone to kill Legere. What more does the street expect or want? Sprint is showing they are serious about getting back in the race right now and becoming the fastest growing wireless company once again, since the PCS days. 4th quarter sub growth is going to be incredible and this will blow it's top once again to double digits...
Good. You are still here. All the stock had to do was fall 2 cents on a measly 100K shares in the last few minutes before closing to get your juices flowing. Else we wouldn't have heard from you for another day. I love it when shorts hold on for the last 5% of their profits. Nobody is blaming your kind for the fall. The management and DE's subsequent action did it. But we will be praising you for your assistance in the squeeze in the near future. Stay greedy my friend.
Granted it looks bad on paper. Stock has fallen 50%. But they are earning $6MM per year. Give 22% of that away, make nothing in return for the cash they just got and that is still 4.68M or the market cap right now! If they buy a distressed silver or gold mine (small window for purchase) and get higher returns, then it is all OK. I think there is a followup PR coming shortly..
I have no doubt they are in the red for that portion. But more than made up by the remaining 82% from their earnings report.
Maybe guys like 7777 are making hay while the sun shines. Better to claim that they made huge profits shorting and covering at the lows than to be squeezed and getting picked on later. He is quiet lately. Or maybe I am giving him too much credit and his ego will eventually get the better of him...
omega, I think you misread the existing 18% deal. They are not giving away 18% of their profits currently. They are just giving 18% of their total production at a discounted price of 75 cents per pound to Anglo Asia. In other words, Anglo Asia is a customer that gets preferential pricing for part of their production. The remaining 82% is being sold at market rates. But the new agreement is 22% of their total profits. It will only make sense if they are using the money for some immediate opportunity that yields more than 22% to the bottom line. We may find out about that opportunity soon enough as it makes no sense otherwise to get funding at such a steep price, when they are a very profitable company already.
Exercise price of $5.62. So, the 3M options is worth zilch right now. But it can be exercised only a year from now and that too only a third of it. If he can do a turnaround like TMUS and get this to $12 by then, then those options are worth almost $20M in a year. Not too shabby, even for a billionaire
Quick, I know there are many characters who post these kind of sad stories to jeer the longs of any company that has fallen to oblivion. They get a sort of sick entertainment by doing so. Perhaps that is why you are not getting much sympathy that you might expect here. Since you have been at it for 2 months, maybe you are telling the truth. I can't guarantee anything like Southi, but there is a decent chance that you can breakeven (or even make a small profit!) on a short squeeze, especially if they get more than the street expects for their schools or if there is a merger/buyout or if they keep operating as a 10 campus FP school after the sale or if the DE becomes more lenient due to political and public pressure. Finally, there are 24M short shares that might actually save you when all is said and done. See my earlier posts. I don't believe in pumping and try to look at things based on facts or technical indicators. 97 cents may feel like the sky right now but on Wall street, it is just another 80 cents! My personal target is 85 cents.
Here's the update on the top 10 holders after the bad news (when everyone thought they are going BK) but before the deal with the DE (which pretty much eliminated BK risk). Net 2MM shares added in 2Q14 and 25MM shares held by the top 10. Remember that over 100MM shares traded between the release of the news on 6/19/14 and 6/30/14. If they didn't sell then, chances are, they are still holding after the deal with the DE. Coincidentally, that amount is equal to the shorted shares as of 7/31/14. The squeeze could be dramatic since retail has already sold and these big boys will not let go for cheap IMO...
Owner Name Date Shared Held Change (Shares) Change (%) Value (in 1,000s)
SHAH CAPITAL MANAGEMENT 06/30/2014 8,277,040 2,302,466 38.54 1,299
DIMENSIONAL FUND ADVISORS LP 06/30/2014 3,323,518 (83,855) (2.46) 522
FMR LLC 06/30/2014 3,069,800 (530,200) (14.73) 482
VANGUARD GROUP INC 06/30/2014 2,440,764 25,820 1.07 383
CREDIT SUISSE AG/ 06/30/2014 2,220,537 1,287,240 137.92 349
NANTAHALA CAPITAL MANAGEMENT, LLC 06/30/2014 1,400,000 1,400,000 New 220
BARCLAYS GLOBAL INVESTORS UK HOLDINGS LTD 06/30/2014 1,364,484 (759,154) (35.75) 214
EUCLIDEAN TECHNOLOGIES MANAGEMENT, LLC 06/30/2014 1,103,439 (1,590,174) (59.04) 173
RUANE, CUNNIFF & GOLDFARB INC 06/30/2014 1,000,000 0 0.00 157
CALIFORNIA PUBLIC EMPLOYEES RETIREMENT SYSTEM 06/30/2014 998,777 0 0.00 157
Unless management saw an opportunity that will yield more than 22% to the bottom line if they act right now with the extra funding. And in that case, it was a leverage move. In any case, this should be trading at 40 cents and not a penny. Not sure what's going on here.
I understand not wanting to dilute shares by 33% and hence going this route. But the royalties in perpetuity is quite steep at 22%. I understand they are a customer as well but not sure why they agreed to that, especially if revenues are climbing exponentially. Also, if they are profitable, why take on the additional financing? But the hacking today of 40% when the company was already grossly undervalued is crazy. Buying at a penny...
While we are talking hypothetical and totally discounting the rumor, why will EDMC need money to propose a merger? They can simply issue stock in the new company, which will be the aggregate of the revised COCO valuation and EDMC. Also, unlike telecom, the govt would want consolidation in this space so that they can watch the fewer institutions like a hawk. They will just require both EDMC and COCO to remedy any outstanding data requests and to fix any non-compliance as part of the merger approval.