Numerous signs now indicating this is nothing more than a totally contrived short scam. FYI, I have seen many of them during my tenure on the Street.
The good news is that the same dirt ball traders running it down now, will then run it back up. Expect selling pressure to ease up once the 12,000 DEC $45 put options play out by the end of this week.
Use that to your advantage!
As previously noted, another classic short scam is to heavily short the stock during slow lunch hour trading.
They did it yesterday too!
Since I know the moron shorts are incapable of doing any analysis, let's take a quick look at the potential impact of interest rate rises on SDRL.
Let's look at the future. SDRL's EBITDA is a running at an annualized rate of $2.65 B this year and cash flow from operations is projected around $2 B this year. The company projects an EBITDA of $4.5 B in 2016, which extrapolates to a cash flow from operations of around $3.4 B, or an increase of $1.4 B from this year.
Now, total debt stands at $12.7 B.
Q: How much would rates have to rise to consume half of the $1.4 B increase in 2016 cash flow?
A: Average Rates on SDRL's $12.7 B in debt would have to rise by 790 bpts to consume half of the increase in expected 2016 cash flow and that assumes all of SDRL's debt is floating, I assume most of SDRL's debt is not.
DOES ANY SHORT MORON REALLY BELIEVES THAT WILL HAPPEN?
FYI, most rate increase forecasts over the next two years are in the 1% to 1.5% range from the current 2.85% 10 year yield.
Now, does that $4.5 B in 2016 EBITDA make sense?
1. The Company has a $19.5 B backlog which is expected to grow, this gives investors good visibility.
2. Demand remains high with three out of the 21 rigs still under construction, having already entered into long-term contracts with customers prior to completion. This year, Seadrill has taken delivery and financed a total of 13 rigs and expects to take delivery of seven in 2014, 11 in 2015, and three in 2016. By the end of this four-year expansion, Seadrill would have roughly doubled the size of its fleet.
3. Mexico is opening up its Gulf Coast to development. This is the largest unexplored region in the world, aside from the North Pole.
Think about it Einstein!
Q: Why don't you provide us with an in depth discourse on SDRL' debt structure and its sensitivity to future rises in interest rates?
A; Because you are some SFB retail short who doesn't have a clue.
Just name calling, throwing out some arbitary numbers, false or wild accusations.
Where's the beef?
The trading scam continues!
I provided the date for the Forbes article where Luczo called out professional traders and Analysts for manipulating STX' share price. Go look it up on the Internet with the key words Luczo/ Forbes.
You might also pull up the price chart for STX after Luczo made his comments and the SEC began its investigation.
For years a trading cartel lead by SAC, Columbus Circle and other NYC/CT hedge funds jacked the drive stocks up and down, regularly shorting them down in the spring and summer months and running them up in the fall and winter. Despite rising profits, the stocks never went anywhere, but the traders and their firms made good money on the round trip. Between early this decade and 2008 STX's earnings doubled and they just traded the stock between $20 and $30 . INTC is another example during this same period.
I refer you to the comments of one Stephen J. Luczo, CEO of STX and an ex Bear Stearns investment banker on how traders with the help of dishonest Analysts manipulate stock prices to generate trading profits for their firms:
From 4/12/12 Forbes Interview of Stephen Luczo on Wall Street's pricing of the drive stocks:
"because the drive stocks are not being priced on fundamentals, they are being priced by large investment banks for volume, and volume requires volatility.
So that's why all the big firms are in a different camp than the smaller research firms on their perspective of the drive industry. Is it because these are the smart guys, and those aren't. That doesn't make any sense. It is because the banks are MOTIVATED by volatility and the boutique firms aren't. AND therefore the research reflects that. So you can create an environment that always creates doubt with billion dollar market cap swings in a week. It's insane. Why does it work? Because you have TRADERS who love to make that work."
Turns out after those comments, an SEC investigation, and the demise of the firm leading the short cartel the drive stocks went up 100%. They set new record highs today, up 70% this year
"BTW, just what the F is "Collusional Predatory (illegal) Shorting?"
Gee with your extensive "experience", I am surprised. Maybe its because you are a retail broker, you don't understand how momentum based trading programs really work?
Congrats, after six hours you finally figured it out. Maybe you can really show us all how intelligent you are by telling us what those licenses are for. Are you some SFB retail broker?
Still have not heard why anyone should be selling this stock outside of SFB chart monkies, i.e. short term traders. Sounds like you are Mr. Short on a lot of stocks, how does it feel making a living as a parasite for 40 years?
You're like the grease balls on CNBC, they talk about peanut short term trades and miss the big runs. For instance that Guy Adamie on CNBC and his parasite bud Jim Chanos have been touting the disk drive stocks as shorts all this year and STX & WDC are up 70%, LOL!
Like you they are too in love with their trading charts to really understand the fundamentals of an industry. You can train a chimp to read charts. Also, pretty damn stupid to be playing chump change short trades in a secular bull market.
Maybe you can also draw on your "40" years experience and tell us why investors should be selling this stock.
FYI, I have been buying more under $40
Do us all a favor for XMAS, either get professional help or ESAD
As far as being in the Big Boy Leagues maybe you missed my code so I will repeat it (7, 63, 86, and 87).
Do you know what that means?
You are either a naive SFB retail day trader or a member of the shorting cartel who is nervous that SDRL may start looking into the trading.
For your education you might want to read up on the excesses and abuses of mindless computer based momentum trading.
We all would be highly interested in what you believe is the short story is on SDRL outside of a bunch of hedge fund parasites trying to rip the shareholders off.
and the reason why the village idiot has carried on for so long and so hard about vikes is that his qualifications on the drive stocks far exceed the qualifications of any of the bean counters who pose as ANALysts, especially those at Goldman, JP Morgan, CITI, Barclays, Morgan Stanley, etc.
One only has to compare vikes' track record over the years to the track record of our motley crew of drive ANALYsts.
"and citi has been wrong on stx/wdc for YEARS"
and so have you.
Too bad some traders have never figured out they can make money the old fashion way by going long.
RDRT was too busy kissing up to STX for business at the time to push the issue. Shows you how naive RDRT was, LOL!
Do you blame STX or sleaze ball Veeco for letting STX have access to the proprietary head dep tool they were developing for RDRT? One account has STX actually taking delivery of the RDRT tool with RDRT getting model #2. The delay raised suspicions at RDRT, prompting a RDRT engineer to be a live-in at Plainview.
BTW, STX was not the only one getting time on the RDRT tool, remember Applied Magnetics (RIP)?
Don't let all the comments bother you. At least you realized it was you vikes identified as the loser right wing nut case. Always a good thing to know thyself.