Jim, Can you give an example of what you mean by conversion premium? My view of bonds with converts is that they simply lower the yield, and might become fully diluted when convertible. I'll leave you alone after this. Have a good weekend!
I've seen similar type bonds from junk rated E&Ps trade at $115 in recent months. If they can finance this as much as possible with debt the better. In theory they could finance this acquisition at 4.5-5%. Following the strip returns might be a little lean in the front years, but there is possibly up to two decades of resource potential. It's scary to think of what the ultimate IRR of this acquisition could be. Yet the market voted by sending CHK up 15% and SWN down 10%...It shows the smart investor still can have substantial edge in the longer run.
I think the market was looking at the financing. SWN doesn't have anywhere near $5.4b on its balance sheet. There is capacity to borrow, but the remainder will have to be financed from equity.
Has it ever occurred to you that you can pick up the phone and call investment relations. Don't bother a rich guy with 10 yahoo ids.
Wow! Look at this guy hard at work with his "tool box" of id's. Amazing how a guy can get 5 or 6 thumbs up off two stupid sentences. I suppose that I could counter the same way, but I'm not a dork trying to make his money on Yahoo's silly playground.
I think that you're actually a geek without a life, as you spent much of the afternoon thumb-downing every post I ever made on this board and otherwise...OUCH!...What do you do when someone makes you mad in your face? Do you take a good hard swing at him with your purse?
So how does a really stupid dude try to make money in the stock market? He goes to "work" on a message board with several different id's. By having several id's in his tool box dumb guy can produce several thumbs ups and downs. The whole routine is an effort to steer market sentiment into his direction...I know that this wasn't news to most of you but this ongoing case study of how a really stupid dude ( DCF) attempts to gain an "edge" in the market is good for a laugh!
I don't care what you post. Generally I don't read your junk anyway. Its just funny to slap a stupid dude in the back of his head every now and then. BTW its ironic how the both you and dagger show up at the same time to defend each other. Sharing the same bed I suppose brings out a special attachment. Later geek.
Not sure why you have to belch out the same response every time someone post an opinion or article that you disagree with. There's plenty of posters on this board who drink from the PR fire hose that you can hang your shaky hopes on. Investing is a constant information gathering contest. Some info has more value than others. Let others be the judge. Whiteoak, and MarvinMaydel are valuable posters. You, Dagger,and Mitchjl, on the other hand are pest.
Not sure why the CEO feels free to speak on how another firm may dispense its shares. To flat out say that the shares wont hit the market is another example of him not pumping the brakes of what comes out of his mouth. More so than most E&P's the success of this one is dependent on the price of its shares. Knowing this I suppose he's wired to dispel anything that may have a negative impact, remote or otherwise.
Bought some at $73. Didn't realize how weak the differentials have become from the hubs surrounding the Marcellus. I know they move a good amount out of the region, and have the uplift, but stock seems to be getting hit largely by association. Unfortunately it's not too unlikely that it could be headed towards that next level of support.
Every time this happens it gets about the same headline-" Bulls pile into XYZ". Then our first thought is that someone in the know is betting on a quick reversal. No doubt that some actually act on this by purchasing that contract or the shares. However, with the stock down 30% in recent months it could just as likely be a short leveraging his gain by shorting more while at the same time buying "cheap" protection incase it jumps to over $7.
From listening to the replay it sounds like nothing will change. If they sell reserves in the Bakken for $100mil, of which $40-$50mil is dedicated to the revolver ( all but $7mil being maxed) the net liquidity is $60-$50mil. However, in the same breath GE said he has another $50mil or so in leases that he'd like to purchase near term.
On the call just about every analyst in one way or another had a question about the liquidity. Will this change the risk profile and cause downgrades? I'm not sure GE did well in addressing the questions. Hopefully the assets come in at his higher range of $150mil...
CapEx $184mil this Qt. GE blazed right through the Relational cash. With the stock down something like 25% in a month, not a particular good time to show another cash crunch.
MHR is roughly 1/9 of the market value of RRC, but MHR has 1/3 of the debt that RRC has, which was my point as to why MHR could possibly make a nice piece to thwart a takeover attempt without killing the value. I've done a little DD on Range and wouldn't mind that scenario. Again a chance to reset my cost basis, lower my risk, and still be in a company that has 40-50Tcfe resource...all for a discount!
I don't know, but the MHR stockholder can avoid the capital gains tax by rolling his equity into a high quality E&P, that arguably has the same upside at reduced risk (think leverage). The $6.75 means nothing. Its the conversion factor, or inverted discount on the acquirer's shares that matter. The fact that your post received 6 thumbs up shows how stupid this board has become...There are a few DWT's on the other side of this...Later
The mega caps have not had their shares decline nearly as hard as the mid-caps and smaller caps. As a result the mega-caps have a stronger currency to do some bargain shopping on Wall St. The primary targets are names like COG, RRC, AR, SWN...The executives of these players may not think now is the most opportune time to be taken out, and might want to do a deal with MHR that was similar to the non-cash WLL/KOG merger, which was viewed as a win/win on the street. If RRC were to come knocking and offered .09 for every 1 at this point i'd take it.
Looking back, this began, I think, with a single transaction back in 2012. Triad sold disposal tank business to GRH for total consideration of $9mil, of which only $2.2mil was cash, the rest was in GRH securities and notes. At the same time GRH received two contracts to haul and store MHR disposal water. The value of the contracts approached $10mil. If someone offers you $10mil in business and finances 78% (much of it equity) you take it almost every time. He may be able to utilize this into a big MLP...Anyone who was paying attention could have seen what was happening, and bought GRH just last year for under $1. I recall one poster (a Wall St veteran) who after he made money off the accounting bounce announced that he was selling most of MHR and going into GRH...Nice move, DM!