They are private equity. Makes some sense for them to reduce holdings.
Also, you are totally right about there being a good argument for being short AGO as a hedge. I went short early in the day and covered before close so I'm not going to do it long-term but it isn't a bad idea at all.
Price is not yet determined.
Comes down to how much demand will there be for 19 million shares. Price will likely come down but I tend to doubt much more than 5% Still, it is conceivable it comes down much more than that.
Did some back of envelope calculations, it is now selling for less than CENX and AA. May not be wonderful future if aluminum business is terrible but at least one stands a chance of making money.
If you PM him on Seeking Alpha you will probably get a response.
There was also a very nice article on Puerto Rico published by Daniel Irvin on Seeking Alpha today.
AGO has more PR exposure than MBIA and of that exposure MBIA carries more PREPA. There are differences in the different classes of debt and AGO has more non-PREPA debt so I can't say I'm shocked that they are moving down more than MBIA as PREPA isn't reliant on tax revenues, it relies on utility revenues.
The decision to not pass the VAT (or GST) theoretically means the PR debt has more risk today than it did yesterday. Bond prices certainly are moving in a fashion that indicates this. Now is moving to a 10.7% yield from 10.3% huge? Most MUNI people would say yes but honestly I can't get worked up about it.
Now not passing the VAT. That I can get worked up about. I think that it is bad for everyone but maybe it makes it easier to increase utility rates?
In the end it becomes a great big muddle but the price already incorporates significant write-downs on PR. I think it is a given that MBIA takes a hit in the quarter coming up on the financials. As headlines move stocks, rather than fundamentals, I can't say the share price doesn't go down but as I said, the share price assumes significant write-downs so maybe the share price doesn't get impacted.
PR assembly voted down proposed VAT. Increases risk of non-PREPA debt. Suppose that is the reason AGO is taking a bigger hit.
Thought it was interesting that it happened in Puerto Rico in 2006 too.
At that time they increased the sales tax rate. Now it is the VAT.
Your guess is as good as mine. I'm sure it varies a great deal from product to product with some losing money and others probably as high as 15-20%
Believe that was my alternative # 2. They simply do not earn enough margin to matter.
Verizon uses Aviat (AVNW) and they are winding down their expansion as it is largely complete so that one is out too.
Guess the big "pump" is on.
Yea that John Lawlor has been right about so many things. IR people are the best sources for information, don't bother with those regulatory filings.
How is this for three alternative scenarios.
1) France does not allow layoffs. Finland does. They keep ALU product line and jettison DRWI and Nokia personnel. Not that it would really hurt DRWI as they aren't getting any margin.
2) Nokia bites the bullet and lays off a bunch of ALU personnel. Tells DRWI they have the business provided they keep margins where they are at. DRWI essentially gets nothing but sales (no margin).
3) Nokia kind of loses control during integration and DRWI gets additional margin. This is the best case scenario.
20-F was filed today.
They got their debt waiver as expected. Hadn't expected a problem but it is one less thing to be immediately worried about. There are some twists and turns in the calculations but they increased their working capital availability by a material amount which should relieve pressure.
Closed their office in Venezuela and Argentina, or I sure thought they had locations there. They may have just shrank them to the point where they were no longer material. Slovakia lease expires in September 2015. That is good too as they no longer need the space.
Head of North American Sales makes more than CEO. If he earned that this year, it sure doesn't jump out at me.
Pretty dull filing aside from the debt changes.
There are momentum arguments for being short. Negative news cycles do drive shares below fair value plus if one wanted to bet against Puerto Rico I can't think of another way of doing it.
Doesn't mean I think being short is a good probability based bet but not everyone is carefully weighing odds.
Saw the Youtube video but that is it. Tend to not believe it when companies say they have better technology. Just about everyone says that.
Even if it is better I don't think the market is willing to pay a substantial premium for the very best and price makes a big difference. As CRNT has lower costs than their competitors (I think anyway) they could theoretically do better and survive a long shakeout but they have made such horrible credit decisions over the last two years that it gets hard to evaluate. Even if a few companies go belly-up and the others combine it might just turn out like all the Wimax equipment providers with everyone ultimately losing money.
Very hard to evaluate. I still own a good chunk of shares but that Venezuela loss bothered me because it did strike me as very poor management. The old CFO is gone though; maybe it was his fault.