Well - in fact it was RGSE that violated the rules obviously. New SEC subpoena just disclosed.
I guess the debtholders are far better off with the shares now that they can sell into the market instead of getting nothing in bankruptcy. And that was the main reason behind the exchange.
The timing of the offering is actually screaming out loudly "WE HAD ANOTHER ABYSMAL QUARTER". Would short with no fear here going into Q2 earnings.
Well, actually they employed a pump-and-dump scheme for the offering which for itself is pretty telling about the company and its management. Even more telling is the timing of the offering. Not only that they obviously burned through ALL of the cash taken in from option exercises during the quarter they also clearly had another abysmal quarter. Otherwise they would have just reported preliminary numbers before the offering announcement to show some progress.
Well. It has already given back the whole gain from yesterday... I am spot on once again.
Really? I fully expect shares to end up being worthless and are willing to stay short until the pre-packaged Tengram deal is announced.
They aren't debt free. There's still a fully drawn bank credit line outstanding. And obviously they burned through another $5 mln in cash AND had another abysmal quarter - otherwise they would have pre-announced good or at least in line preliminary numbers before the offering to attract buyers. Sell.
Well - they wouldn't have offered the shares just before quarter end if they had anything great in the cards from an earnings perspective. Obviously they even burned through the $4 million from warrant exercises.
Another abysmal quarter is clearly in the cards here. Would short the shares.
I guess panic is well deserved here. The company is AGAIN raising money before the end of the quarter which is a strong indicator of another dismal quarterly performance. Otherwise they would have raised the money after the release. And they fabricated the share price increase by publishing the good news in the morning and then follow up with the offering in after hours. And they burned through all of the money from the exercise of warrants during the quarter obviously.
I fully expect the deal to include a pre-packaged bankruptcy, debtholders to get a haircut and Tengram to provide DIP financing.
The market did assign MCP a $150 mln valuation until yesterday. Participants simply have no clue when it comes to distressed companies
I don't think debtholders will get their money back in full so consequently there should be no value for shareholders left then. Tengram would be outright dumb to reward both debt- and shareholders. But perhaps you are still believing in Molycorp, too.
Well - I go with DJ here and that's exactly the kind of outcome I would have expected anyway. There's no way for the equity to survive and perhaps even debtholders will have to take a haircut.
Nonsense. The DJ article is stating that the deal would likely be done below $100 mln and that of cause includes the debt. In fact it is all about the debt here and not about the shareholders anymore. Only if the debt would be paid back in full including interest payments the shareholders would stand to get anything. Which they clearly won't in this case. The shares are a terminal short here.
Tengram Capital Partners in Talks to Acquire Joe's Jeans
LOS ANGELES--Joe's Jeans Inc., a retailer that has been threatened with a delisting from the Nasdaq Capital Market over its depressed share value, may be close to lining up a buyer.
Private equity firm Tengram Capital Partners is in talks to acquire Joe's and its subsidiary Hudson Clothing, according to people familiar with the situation.
The deal could be valued at less than $100 million, and Tengram is still assessing the situation, the people said. Tengram is also in discussions with lenders for financing on the deal, one of the people said.
In February, Los Angeles-based Joe's disclosed that it hired Carl Marks Advisory Group LLC to explore options, including a potential sale or restructuring, after it defaulted on its roughly $90 million debt load, according to filings with the Securities and Exchange Commission.
Joe's had been in default since November with senior lender Garrison Loan Agency Services LLC. The company holds a roughly $59.1 million facility with Garrison, and the violation also caused a default on its revolver with CIT Commercial Services Inc. As of Feb. 28, Joe's had drawn about $23.8 million from the revolver, and about $11.6 million was available. The company had a cash balance of $1.1 million as of that date.
Joe's took on substantial amounts of debt in 2013 when it acquired fellow jeans retailer Hudson Clothing from private equity firm Fireman Capital for $97.6 million, which included cash, debt and $22.9 million in convertible bonds.
I guess they have no choice here. And the DJ article actually implies just that. Perhaps current shareholders will get 5% of the new equity but I don't think so. Tengram would want to own 100% and therefore the equity will have to be cancelled.