Well - it is all in the news. Just read it. They will file a pre-packaged chapter 11 and emerge soon after that as a healthier company. The old shares will be cancelled and for every 1,000 of your old shares you will get 31 new shares of the new HERO plus some free options to buy additional shares.
After that current bondholders will own 96.9% of the company and current shareholders will own the remaining 3.1%. That's it.
The shares are worth roughly double that amount and are currently trading 50% above the fair price in after hous. So I guess you might want to take your loss now and buy back at $0.10 tomorrow ?
At $0.10 I would buy all I will be able to get tomorrow.
The old debt is gone completely. There will be some new debt but just a little over 1/3 of what has been on the balance sheet.
Well, the oil price is obviously not within managements reach and holding shares in a company like HERO comes with huge risks so I wouldn't blame management here. Bought a huge chunk at $0.25 in after hours.
That's wrong. As a shareholder I wouldn't sell down here (other than for tax reasons) as I will get at least a small part of a much healthier HERO and also some options. The fair value of the shares seems to be somewhere between 15 and 25 Cents currently.
Regarding new contract acquisition they will have to materially increase the speed as well as the size because otherwise they will fall WELL short of their full year targets once again.
I guess the minor additional loss experienced by you through today's events wouldn't exactly push you into bankruptcy...
Actually they would have announced those hypothetical contract parallel to the offering to generate more demand and to absorb the share price impact.
Well, this was absolutely foreseeable. Current shareholders should indeed feel lucky for not getting wiped out completely.
Current shareholders will get 3.1% of the restructured company and some additional options. If we assume a valuation of $1 bln for the restructured company the value of the old share capital should not exceed $30 mln currently which would calculate to a share price of $0.20
No one knows at this point. At this time Cowen is lining up clients and checking demand. Given the share price the offering is hardly a surprise here. Would expect the company to sell around 4-5 million shares at a price around $12.
well the data looks good compared to an absolutely poor performing control group but wouldn't show much difference to a normally performing control group.
They are registering the 55mln shares issued to SFL for resale AND THEY filed another $100 mln shelf registration. In the past the company has made almost immediate use of these registrations by upsizing their ATM agreement with Morgan Stanley
There was absolutely NOTHING on the call hinting at that. No one asked about this topic and management don't even touched it. Given the voting rights structure of the company there is zero incentive for activist investors to step on the plate either.
Well it will only take a few quarters - they burned $100 mln last year . They will deploy most of the cash during their inventory build up for the holiday period and then hope to collect their ar after that. 2015 will be a bad year so they will continue to burn considerable amounts of cash. 2016 will be their last try as they will have to utilize their credit line heavily then to prepare for that crucial holiday
Well - they already have $70 mln in "believed to be current" inventory AFTER the holiday season. Their inventory level going into the Christmas quarter usually is around $100-120 mln. So if they are coming close to dip into the revolver to build up another $40 mln in inventories I am wondering where the rest of the cash might go until then,
Perhaps you should better look elsewhere to put your money if you don't get this. Realizing revenues and collecting cash does not necessarily fall into the same period. Actually the company is shipping the majority of their products in advance to big holiday seasons and offers their customers some time for payment. So the cash increase on the balance sheet is from revenues already realized in prior quarters. The corresponding accounts receivable balance is down heavily accordingly.
Well this is VERY basic knowledge.