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ARM Holdings plc Message Board

dewey_duhawk 77 posts  |  Last Activity: Jul 28, 2015 10:48 AM Member since: Jun 22, 2002
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  • Reply to

    CONSIDER THIS

    by jsc92157 Jul 28, 2015 9:50 AM
    dewey_duhawk dewey_duhawk Jul 28, 2015 10:48 AM Flag

    "Conversely, GAAP should allow for a write-up of assets if the value increases"
    These write downs are a gift from the IRS. CHK won't pay any taxes for years. If they write-up the value of the assets, they pay taxes. Who cares what the green eye shade crowd think the value is.

    Pay attention to the value indicated by asset sales and cash flow. GAAP value measurements are close to worthless.

    Sentiment: Strong Buy

  • Reply to

    $15 book value?

    by gohighstems Jul 27, 2015 7:19 PM
    dewey_duhawk dewey_duhawk Jul 27, 2015 7:26 PM Flag

    Based on asset sales they have made in the last year, the real value is over $35 per share.

    Sentiment: Strong Buy

  • They are now up to 194.24M. This is as of July 14th, which is before the sell down on high volume last week. I have to believe that it went up a lot more then. Basically, shorts had to add another 10 million to their total while the SP actually went up.

    Last week, the volume was huge. Much of it might have been institutions that had to get out because of the dividend, but some was probably more shorts.

    What bad news can they come up with this week to hold off the inevitable bounce back?

    Maybe a bad earnings report will save them, but I doubt it. A bad earnings report is already expected. What happens if it is a good report? What happens if CHK reports another lucrative asset sale? What happens if they report a big joint venture project in the Utica? There are unlimited "what if's" that could blow this.

    The shorts are like a man holding a wolf by the ears. You can't hold on forever and you know what is going to happen when you let go. No one is coming to save you. You better get out before your fellow shorts do.

    Sentiment: Strong Buy

  • Reply to

    Question for Options Experts

    by metalman_7911978 Jul 26, 2015 12:00 PM
    dewey_duhawk dewey_duhawk Jul 26, 2015 5:08 PM Flag

    Check you math. Buy at $8.26 and sell a call for $1 and your cost is $7.26. Assuming your shares are called in September, you get $9. I call that a profit of $1.74 or 24%.

    Sentiment: Strong Buy

  • dewey_duhawk dewey_duhawk Jul 24, 2015 10:15 PM Flag

    Actually, more like $1.3 billion of preferred gets taken from the balance sheet with this transaction. I am pretty sure the remaining $1.7 billion will disappear in another transaction soon. I don't think the first one will close until sometime in the third quarter, so we won't see it in this earnings report.

    This $3 billion gets taken from the non-common stock equity part of the balance sheet. Far less than that will come off the asset side of the ledger since the assets are severely under valued. This will be a gain in common stock holder equity of about $1 billion dollars. That takes a lot of the pain out of recent asset write downs. Too bad it won't show up in the 2nd quarter report.

    For some reason, I doubt that management will even hint at it until it is carved in stone.

    Sentiment: Strong Buy

  • dewey_duhawk dewey_duhawk Jul 24, 2015 7:01 PM Flag

    "Someone that knows more,,,,, what am I missing?" Last fall, with oil at $80, CHK sold 7% of their assets for $5 billion. Obviously, you and I are not missing anything. The detractors want to scare everyone with stories of hidden liabilities, but all I see are hidden assets that are severely undervalued. CHK is worth $35. Unfortunately, propaganda and FUD work.

    Sentiment: Strong Buy

  • dewey_duhawk by dewey_duhawk Jul 24, 2015 6:03 PM Flag

    Over the last 10 years, CHK has repeatedly leased land, developed the asset and sold at a very high profit. The problem is that the leased land looks like an unproductive asset, the development is a charge to FCF and the sale is reported as a one time event and they get no credit for it.

    The assets are undervalued because of silly GAAP rules. This gives the media an excuse to write all kinds of scary articles that do not reflect reality.

    Basically, developing and selling assets is their actual business model. They probably made $2 billion in 2014 and $500 million during the first half of 2015 on the asset sales. If the price of NG and crude were constant, these profits would show up on the balance sheet.

    Except for the write-down (past and present) the CHK balance sheet is looking better all the time. The write downs are bean-counter nonsense. The reality is CHK is looking very good. All we need is a little relief on NG and crude pricing.

    Sentiment: Strong Buy

  • Reply to

    ONCE the bondholders start

    by mike_masin Jul 24, 2015 5:40 PM
    dewey_duhawk dewey_duhawk Jul 24, 2015 5:48 PM Flag

    Those bonds could be sold and bought and sold and bought a thousand times. Doesn't influence CHK at all. As long as the current holders get their checks, everything is kosher.

    Maybe the holders will bid them down and CHK can buy them back at a huge discount like they did with the preferred stock.

    Sentiment: Strong Buy

  • Reply to

    Six Days Of Straight Pain ..........

    by gargoyletrader Jul 24, 2015 3:11 PM
    dewey_duhawk dewey_duhawk Jul 24, 2015 4:40 PM Flag

    "You have to wonder what is going through the minds of management at this point?"
    It's the quiet period. They can't say or do anything. Maybe that is why this is happening. The manipulators know there can't be any interference. I am worried about the size of the next write down, but expect good news at earnings.

    The preferred stock debt is being closed out at a big discount. With additional asset sales, they could probably buy back some other debt at a big discount.

    Instead of a buyout, I would look for joint ventures like an expansion of the Total deal in the Utica or a deal with the Indian oil company that was rumored earlier. These could bring in cash to drill and resolve some of CHK transportation issues.

    "Another thought: Why in the world does Morningstar rate CHK with 5 Stars?" Because Morningstar knows the value of CHK.

    Sentiment: Strong Buy

  • dewey_duhawk by dewey_duhawk Jul 24, 2015 12:38 PM Flag

    How long do people have to cover a margin call? A lot of people probably doubled down using margin recently when CHK got below $12 and stabilized. Then, when it hit the fan this week, people have probably been getting margin calls every day. Until that is over, CHK will not stabilize.
    These manipulators probably take great pride in the number of lives they are destroying. I wish I believed in Karma.
    The bottom is near. I bought more an hour ago and I will buy more next week.

    Sentiment: Strong Buy

  • Reply to

    Straight shot to 3.

    by bernardkeszner Jul 24, 2015 8:42 AM
    dewey_duhawk dewey_duhawk Jul 24, 2015 8:47 AM Flag

    Do the math. That would be a market cap of $2 billion. Do you realize how stupid that suggestion is?

    Sentiment: Strong Buy

  • Reply to

    shorts in oil and CHK

    by thegypsywasright Jul 23, 2015 9:15 PM
    dewey_duhawk dewey_duhawk Jul 23, 2015 10:40 PM Flag

    First, the Arab states cannot make money on $20 oil. For new oil wells, I don't know that their costs are any lower than the frackers.

    Second, the Arab states are all dictatorships. They need $100 oil to keep the riff raff from revolting- can't wait for the revolts to heat up even more.

    Third, In the very long run, prices are about supply and demand. In the short run, prices are about perception. Shorts are controlling perception for now.

    Fourth, KSA is in negotiations with Hamas to counter the Iran/Hezbollah/U.S. axis. For the first time in my life, I think we are on the wrong side. At least, that gets the world to a huge Middle Eastern war that much sooner. Hopefully, there will not be American boots on the ground.

  • dewey_duhawk dewey_duhawk Jul 23, 2015 1:38 PM Flag

    "Not if it goes to zero."

    This is a good example of some of the incredibly stupid comments being made. You can't short to zero. At some point, CHK would just buy back the stock and retire it and a small core would hold closely held shares. There would be no market for the shares and the price would go to infinity since there would still be 200,000,000 shares short. Think about it.

    Last fall, CHK sold 7% of the company for $5 billion. Last month, they sold 1.5% of the company for $840 million. What if they did a deal today the was better for the buyer than either of those? Let's say 30% of the company for only $10 billion.

    At $8.5/ share, they could retire 90% of their shares for $5 billion. Do the math. There are currently 130% longs and 30% shorts. If 90 of the shares were retired, you would have 400% long and 300% short. The shorts have open ended loss potential. You people are absolutely insane to hold a short on a company with the potential to destroy you any day with a simple asset sale.

    Sentiment: Strong Buy

  • I find it interesting that no articles or analyst comments say anything about the FourPoint transaction. This transaction was $840 million for 1.5% of CHK properties. This would value CHK at over $35/share.

    Also, the $750 million that FourPoint paid to the preferred stock holder appears to be for preferred that CHK is holding on the balance sheet at about $1.3 billion. This is about a $550 million gain for CHK. An even bigger transaction will be reported shortly taking the remainder of the $3 billion of preferred stock off CHK balance sheet. This is essentially a debt reduction with a capital gain to CHK of over $1 billion. This is much more of a positive than the negative legal judgment or the dividend reduction. Of course, I would prefer than no company stock that I hold pay a dividend so that was no negative.

    CHK should have gone up $2 on the preferred stock transaction alone. I don't think any of these analysts understand it- or the don't want you to!!!

    Sentiment: Strong Buy

  • Reply to

    CHK bankruptcy soon?

    by keltus1952 Jul 23, 2015 1:36 AM
    dewey_duhawk dewey_duhawk Jul 23, 2015 5:41 AM Flag

    "XOM;CHK SWE will be the best positioned when oil and gas return to better levels ."

    SWN has no cash. They are way over priced compared to CHK.

    XOM is really a different category. They are not heavily into fracking. They are probably now concluding that fracking is more economical than their current model of bribing foreign dictators so that they can sink billions into off shore platforms.

    XOM and the other majors will spend the next few years buying up bankrupt fracking assets and then trying to clean up the mess.

    SWN and the other dogs and cats will struggle with no cash. CHK has the cash and the critical mass of expertise to continue drilling and drill at the lowest cost. Their mess is almost already cleaned up.

    It looks to me that production will be drying up as some of these competitive assets collapse. CHK needs to strategically sell developed assets and DRILL BABY DRILL.

    Sentiment: Strong Buy

  • Have you noticed any articles about the FourPoint transaction? None. I don't think the media understand it. Here is my take.

    CHK is getting rid of $75 million of preferred dividends out of their current annual preferred payments of $171 million. That is 44% of their preferred dividend obligations. FourPoint reported paying $750 million for the preferred stock, but CHK never says how much of the preferred stock comes off the balance sheet. The $750 million was paid to a third party holder of the debt.

    The balance sheet shows $3 billion in preferred stock, but that is face value. It looks like the real vale is $750 million/44% or $1.7 billion. This is a 43% discount. This makes perfect sense considering the current CHK SP and corporate bond market. The rest of the preferred stock will disappear with another transaction that will be announced soon. I know that because CHK no longer shows any stock dilution due to preferred conversion on their income statements. All of this is good news that they are holding back for a future event.

    Also, all of their debt has less value than the numbers on their balance sheet. It would take far fewer asset sales to pay off a big chuck of that than is currently believed.

    Sentiment: Strong Buy

  • dewey_duhawk dewey_duhawk Jul 22, 2015 4:25 PM Flag

    "WE Will CONSUME AND CONTINUE TO CONSUME at some point we wont have enough again. Strong Buy"

    You sure have that right. I tried to explain to my wife (who has never taken economics and is somewhat math-challenged) the concept of totally inelastic demand.

    Inelastic demand would be where a commodity price could drop in half because of a 2% over supply and demand would not increase at all- EVER. I tried to 'spain it to her while we were driving down the road in our 7 MPG motorhome. She didn't believe it was possible.

    Why do half the people on this board accept that demand for NG and Crude are totally inelastic when there are people in the world cooking dinner right now with dried buffalo droppings as the fuel? Meanwhile, I am driving my motorhome a lot more these days.

    Sentiment: Strong Buy

  • dewey_duhawk by dewey_duhawk Jul 22, 2015 3:38 PM Flag

    crude supplies are up 2.5 million when they were suppose to be down 1.6- Total +4.1
    However gasoline supplies are down 1.7 when they were suppose to be down .6- Total-2.3
    And heating oil is up .2 when it is suppose to be up 2 million Total-1.8
    They all cancel each other. Total is right where it was suppose to be.

    Total supplies are up for the week because OPEC imported more into the U.S. last week than any week this year except one.

    Sentiment: Strong Buy

  • Reply to

    Time for another fire sale

    by devalljeff Jul 21, 2015 7:38 PM
    dewey_duhawk dewey_duhawk Jul 22, 2015 8:36 AM Flag

    "another call I made... more fire sales to push off bk filing"

    CHK asset sales are absolutely not "fire sales". CHK has world class assets. They develop them then sell them at premium prices. Go to the SWN message board and read the whining about the price they paid. The price they got represented a CHK value of around $80/share.

    The recent asset sale was $840 million for about 1.5% of CHK properties. That puts the value of CHK at $40/share. CHK can replace that 1.5% in a few months of E&P.

    I hope CHK has more "fire sales" in the works. Three or four a year of the SWN size would be great.

    Sentiment: Strong Buy

  • dewey_duhawk dewey_duhawk Jul 22, 2015 8:18 AM Flag

    Here is a great idea for people in CA who are getting totally screwed over by the whackos running that state. They are now paying $4 for gas because of refinery regulations and 3 times the national rate for electricity because of con jobs on roof solar panels that force honest people to pay for the electrical grid while the solar panels cans use it at no cost and at their convenience.

    Get off the power grid. Use either national gas or propane for all your energy needs. Convert to natural gas or propane for your car and fill it at home. Put in a generator and produce your own electricity. You might even want to put in a natural gas or propane air conditioner.

    Better yet. Just leave CA. If you are capable of making a living, move to NV. We have no income tax and few whackos- so far. If you are looking for a great place to sit back, smoke some dope and collect welfare- stay in CA.

ARMH
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