Long-term dividend investors lose: WHX is a trust that, at current production rates, will end at $0 after 5 more distributions in early 2015. Every distribution removes value that will never come back to the trust. Long-term holding is, literally, a zero sum game. This information come directly from the company's own 10-K "warning".
Long-term value seekers lose: The underlying value of WHX is more than a 50% discount to recent price. Value destruction is guaranteed. You get hit twice. First, the dividend gets pulled out of the stock automatically so you lose that amount on the stock. (i.e if the stock closed at $4 today and pays a 50 cents dividend, on the ex-div date, the stock AUTOMATICALLY opens at least 50 cents lower.) Secondly, the stock is going to zero AUTOMATICALLY by June 2015 so at some point, you are guaranteed to lose all of your current investment. Whatever your buy-in number is (basis), count on losing 100% of that.
Short-term dividend seekers lose: WHX has fallen by more than its distribution on 92% of past ex-dividend dates since inception, often by double or more of the actual distribution. Short-term dividend seeking loses money and there's no way to avoid it. You can't sell it fast enough on the ex-div date to make any money. If you buy the day before ex-div to get on record and the dividend is 50 cents, the stock will automatically open AT LEAST 50 cents lower when it resumes trading in the morning and 92% of the time it's much more than that.
Heck, even the guys who know all of this and would love to short it can't because everyone in the world knows (including every SEC filing from WHX) that it's going to zero and if your firm can borrow the shares, you'll get killed with the borrowing cost and fees to do so.
How many times have you ever heard of a stock that guarantees longs and shorts BOTH lose?
Sentiment: Strong Sell
The stock is getting manipulated by the short-term traders. With only 100-200K shares exchanging hands, you could easily make 2-3% every other day pushing the stock around. Nobody should be buying this with intentions of holding it. It would be like going to the store to buy a shirt and the price tag on the shirt says $30 but you offer the salesperson $45. This isn't like a "normal" stock where you can say it's trading X below its book value and it could go up. I know nothing goes down in a straight line but this is going to zero in a little over a year. That's a fact. This stock has zero value except for the dividends and there are only 5 left according to the company, with a value of $2.50-$3 MAX. It is factually impossible to get more than $3 out of your $4.88 purchase and it's even more stupid to try to just capture the dividend since the stock drops significantly more than the payout on each ex-div date (has done so in 11 of the last 12 quarters). 92% of the time you LOSE money on the ex-div date even though you just got a hefty dividend. So you're getting a 50 cent dividend while the stock loses $1 immediately upon opening. Would love 2 min with anyone buying this stock just to see their reasoning (or lack thereof).
Sentiment: Strong Sell
I go away for a couple hours and all my orders went off. I know you'll be sad to see me go. Might be back if it ever gets back to 10. Wish I could write a prescription for a few of you but it's been fun. Have fun bashing me while I'm gone.....I'll be out shopping :)
See how ridiculous? No stock in the history of trading goes up "like a rocket" after diluting by a number equal to a quarter of its entire market cap. (also, pull up my posts, I've only been in the stock since last Mon so any mention of the stock going up "right after the Apple announcement" is irrelevant to me). I know I've gotten to you when you say "I lucked out". Funny stuff piggy.
How bad do you have to be to admit that you're trying to control the actions of someone in a chat room? Ok, I'll stoop to your 4th grade bullying......... MAKE ME
The losses I will incur? Have you looked at a chart since I've been here? If this touches $9 everything will get covered so there's a 0% chance of me making less than $1/share let alone losing anything. Thanks for the advice though.
What a total control freak. Now you're telling me why I'm here. Dude, seriously, you need help. This obsession you have isn't cute anymore.
I define Wall Street as a collective reaction to and action irrespective of any time frame. We aren't not talking about anything that happened last year or anything that might happen in the future. Your post was about dilution....period so don't now start changing your story into long term vs. short term. The reaction to the dilution by Wall Street, not analysts and not small time investors, was to bury the stock. You can either accept that Wall St hated the dilution or think that you know more than them. There is no other choice and you seem to still think Wall Street - wrong, hapihammer - right. I can't hep you.
I don't think everyone else is crazy, just you. Ok, maybe crazy wasn't the right choice. Let's go with troubled. And like I said, all this rage can't possibly be just because someone, whom you're never going to even meet, has rattled you in a yahoo chat room for simply disagreeing with you. Has to be more to it that that. If it were just me doing that to you all by myself, you seriously need help.
I'm not an egomaniac like you who thinks anything I say in a stupid Yahoo chat room would be sufficient to move a stock. I'm here because I like to read informative posts, especially the ones who don't agree with me, but every once in a while, I run into a loser like you who just comes here to run his mouth because he sucks in the real world and this somehow makes himself feel better. Whatever gets you through the day, bud.
OK, let's forget about all the jargon and use basic common sense then. If it wasn't a bad thing, why did the stock drop $2 in 5 days on no other news? Bottom line is the stock got hammered because everyone else hated it except a few guys like you. You need to stop thinking you're smarter than Wall Street.
Nah, just think you're a mad guy looking for something to hit. It's cool though. I spent this morning removing BBs from an infants back because her father couldn't get her to stop crying. You think I give a #$%$ what some nobody in a yahoo chat room thinks?
What about covered calls? A March $10 is paying $.75. If it jumps back over $10, that's a 26% profit over today's price in 3 months. Plus if it does nothing and just sits bounces around $8-9, you make 9% even if the stock doesn't move.
See? Just mindless rants for the sake of yelling. No point or intelligent thought whatsoever. This obviously goes much deeper than just a stock or a yahoo board and you project whatever sucks in your life onto everyone here just to make yourself feel better. I sincerely feel bad for you and hope you get it sorted out. GL
6) There are exclusivity provisions that heavily favor Apple so forget about sapphire on any Samsung device for example, as long as a deal remains in place. Add this to #5 above and you get, "you are required to have a min capacity but we aren't required to buy or use it AND nobody else is allowed to either"
7) The shorts are not panicking as some have suggested. The agreement with Apple and subsequent run up did nothing to decrease short interest. Since late September (well before the deal announcement, short interest has been and still is consistently between 32-34 million shares.
Guess that's all for now. I know you're hoping I'm wrong and I very well could be, but at least now you have the other side of the story and why a lot of pros(that are way smarter than any of us), aren't all gah-gah over this deal and think Apple went a little overboard trying to get GT under their thumb. Time will tell.
Don't fall in love with this stock. Even if you think everything will come up roses with Apple long-term, it will be a hugely bumpy ride along the way. Take advantage of the volatility. GT will still send you a Christmas card. If you guys would have listened to reason instead of just immediately bashing every negative comment about your beloved GT, you could have made a lot of money this past week (or at least held on to $1.50 of your previous profits). Spin it how ever you want, but massive dilution is NEVER good. Sometimes necessary, but never good. There was no way the stock stays above $10 with 2 offerings 3 days apart. You guys also need to realize you're going to learn a lot more from people who disagree with you than from people who just tell you what you want to hear. If you're one of those that only want to hear everyone agree with you, stop reading (if you haven't already). Otherwise, this is why I am, let's say, skeptical long-term, but absolutely hate GT short-term:
1) Lost $40M YTD and missed "their number" by 1,311% with revenues dropping 75%
2) Lowered their FY13 earnings from a $.32 profit to a $.45 loss or a 77 cent miss
3) Negative operating cash flow of est. (-$160,000,000) for the trailing 12 mo. This dilution was coming with or without an Apple deal. The money was to stay afloat, not "gear up for all the new orders" as some have stated.
4) Apple has stated that GT's gross margins from their business will likely "be much lower than GT is accustomed to" (i.e price pressure). Subsequently, GT has lowered their gross margin projections by 5% FY13 and over 10% going forward.
5) The deal states GT is required to maintain a minimum level of capacity but Apple refused to guarantee a volume (i.e. "you are required to have X amount of product on hand at all times but we're in no way obligated to buy it)