Revenues for Q1 are guided to be $41.5 mln at the mid-point which is down roughly 20% from Q4
I don't fear for the company but for their current shareholders. They will settle the convert with more shares, so current shareholds do not own even 40% of the company in three months
It has been quite clear for some time that management is willing to accept any kind of dilution to take in much needed cash. But given the business environment I am surprised they are not looking of new options available to them. Clearly management cares for themselves and the business as a whole but they don't give a sh*t about current shareholders. As long as this attitude persists the shares remain uninvestable.
another 25 million shares are waiting to get sold into the open market asap
I would agree that the stock might give back most of the after hours gains as the huge beat was mostly caused by an one time event and Q1 guidance is down 20% qoq.
At least I am hoping for a nice pullback as the stock looks a good medium term investment going into next quarter's earnings
no - there's nothing wrong with picking a tanker stock given the oil price contango, but they should have picked another one actually
The guys on fast money are pumping shares all of the time, that's their job I guess. People want to know about getting rich pretty fast.
and hopefully they used the ill fated Fast Money pump to sell close to $40 mln in January 2015 so far at elevated prices so that they were bumping against the $100 mln ceiling and needed to upsize the offering.
I would have applauded management if they took advantage of $4+ prices, completed the $100 mln existing ATM offering in January and abandoned it thereafter.
But upsizing it by 50% despite the share price being down 50% from its most recent highs is a bad sign and shows that the company still seems desperate to take in additional cash at the expense of shareholders.
With the April bond issue still not resolved and an heavily upsized active ATM offering still in place the shares are the wet dream of any shortselller and should be avoided short term.
Would expect the shares to be down another 20% easily tomorrow.
still pretty strong numbers and guidance
nonsense - they actually UPPED the amount of the ATM line, that means they most likely already exhausted the $100 mln (which I would have liked) and still plan to issue more shares near term (which I don't understand).
the shares are an easy short given management's indication that they are still willing to issue another 25 million shares despite the stock being down 60% from recent highhs
April 2015, 4,5% convert
Why should the shares be up with the company effectively pointing to more dilution within the next few months ? Cash will be mostly burned within the next few quarters and given the share price I don't see the possibility to raise further cash.
Given the huge improvement in dayrates during the last few months but today the company made it quite clear that they still need more cash in order to deal with the upcoming debt maturity. Actually nobody would have imagined that they still make use of this ill-fated ATM offering. If anything they should have sold shares when the stock was pumped on fast money and traded above $5 on giant volume.
Today's news sends very poor signals to the investment community:
1) The company's cash flow obviously is coming in much weaker than anticipated
2) The convert won't be refinanced (which really should be no problem given current business conditions)
3) $2 obviously is still a good price to sell for management
4) Management doesn't care at all for shareholders
I find it hard to understand why management acts like this and therefore would advice to avoid the stock at all cost.
as said before I would expect the shares to lose 25% easily today and to be down double digits again tomorrow. The news is a strong signal about management's idea what the stock might be worth.
I don't think so - as long as the debt maturity is looming the share price simply has no chance to sustain any advance given the fact that management is willing to issue shares at ANY price. If Frontline management thinks $2 is a good price for shares to sell investors shouldn't think the opposite.
shares might easily be down 25% or even more today as it has become usual on more dilution initiated by management. And even worse the stock will be down heavily for one or two more days as this has been the case the last times
Today's filing again shows that management is willing to dilute current shareholders beyond recognition in order to keep the company afloat (which of course is better than bankruptcy). The shares should be avoided at all cost until the convert maturity has been put to rest once and for all.