This is what happens to commodity prices when cartels are broken.
Classic example of this is what happened to potash prices and potash stocks after the breakup the Uralkali and Belaruskali potash cartel. Potash stock prices are still falling.
In case of Oil, not only the opec cartel is broken, but there is unrelenting competition to over produce since the oil producing countries are trying to fill up the national budget gaps since major percentage of their budgets depend on oil export. With depressed oil prices, they are producing / exporting to max capacity to support their currencies that are crashing.
Worse is yet to come for Oil prices when some of the refineries shutdown for maintenance and shift to cheap winter blend occurs in September.
And finally if nature decides to throw in a brutal winter as is happening for the last couple of years, it probably will be game over for many small energy companies.
I am staying on the sidelines and keep watching the show for now until the major correction in capacity occurs due to closures / mergers, etc.
My bad. I am not saying that nitrogen based fertilizer is a substitute for potash.
Just that if the soil has enough P & K after mining, a farmer can do away with reduced or zero P & K for a year and only use nitrogen based urea. thus reducing the demand for potash.
With over 50% drop in crude oil and gasoline prices, the price of ethanol and hence the corn is now reduced. So farmer change to alternative crop resulting in reduced demand for potash.
Here's the basis : croplifeDOTcom/special-reports/state-of-the-industry/fertilizer-bracing-for-slower-demand-in-2015/
Growers are looking for ways to minimize expenses,” says CPI’s Schafer. “That means less phosphates applied and more serious consideration given to alternative crops to corn such as wheat and soybeans.”
I would not buy POT for atleast another 6 months.
1) Potash and it's management are a disaster. It is going to be even worst from here.
2) The fact that bridgewater sold off it's entire 1.2 million shares, means that even the best of the best has given up on POT.
3) For the last 2 years, I have been reading the articles from MF, street and other paid pumper articles with the anticipated population increase and demand for potash, however the price is moving in the opposite direction from $800 to $300 ...
4) Low crude prices have made nitrogen based fertilizer cheaper. Farmers are mining the land for P & K from previous uses and find that the content of P & K are still high. this reduces the demand for POT.
5) Although it now seems unlikely, but If POT buyout of K+S succeeds, I would totally stay away. It seems like a highly overpriced deal made in a desperation now that the commodities are in a bear / recessionary price level.
Do your own DD and keep emotions aside when money is involved.
Too bad. On what basis did you decide to put your good money into this dying company.
Don't expect any profit. I am in a 10 K hole. In all my investing and day trading, I have never made such a big mistake as investing in RCAP.
CEO and CFO already left. Their debt is unsustainable and business is unprofitable.
Luxor is squeezing out all their investment by shorting their stock.
Bankruptcy is now the only option.
GOGO is repeating the similar pattern like the previous 12 months.
It is going to remain in this range $15 to $19 till January.
Since GOGO is a news driven stock, expect occasional spikes on 2KU news, but due to slow implementation and high operational cost, the profit will always remain low.
BV does not matter at this stage. The reality is that no one knows yet what the new CEO is cooking and when his health stage and growth stage for ARCP are going to start and end. Nothing is disclosed yet and August 2015 is still a long way away.
Also, there is total silence on the lawsuits and investigation by SEC, FBI, etc and if there are any more skeletons in the closet that the new CEO has found.
ARCP stock price crash may be following the volatility / crash in the bond market and stock market, but erasing 2 Billon in market cap, seems that there is something bad is brewing inside.