The stock has been under savage short attack by 2 SA articles, calling for much lower prices. It probably did o.k. today under those circumstances. It could have been worse.
Agree. "It is what it is" as far as the deal is concerned. "What it finally is" is a question for the future.
$55 per share is what it is for the present. "Mr. Market" missed the short term drop, but he sure was right about not predicting any kind of short term rise, as so many here expected, once the deal would be announced.
This guy cannot possibly have any idea how much gas IOC has, and yet he presumes to "expect that they do not have enough gas to incent Total to proceed with this project." So he knows what Hessions and Total do not. Really?
The significant thing, IMO, is that a claim that IOC is worth no more than $10 was unable to knock it down any further today. That may mean we have bottomed. What more can the shorts now throw at it, after Tilson and this guy?
The irony is that the law suits require up to 5 years to go through the court process if they do go to trial, by which time they have contributed to the destruction of the company so that there is no money left to pay the class action holders even if they win. Of course, the lawyers don't expect to have to win their case. Perish the thought that it should even go to trial! What they always want is an out of court settlement in which they get 60% or more of any money paid and their clients get next to nothing. That is how it usually works. Anyone who lends his name to be lead plaintiff is only harming himself.
By now everyone has had a shot at analyzing the "deal." It is a short term negative for the pps, and hopefully a long term positive if everything works out o.k. The best Hessions could do, evidently. He never mentioned WHEN he was going to produce shareholder value, and if we take him at his word he is a happy camper with what he accomplished for the long term. So the disappointed short term longs are bailing out. Nothing we can say to persuade them to stay in. These current pps should produce outstanding returns for new investors with long term horizons. Those of us like myself who have already been holding for four years just have to be patient and hold on for some unknown future period until new drilling reconfirms the assets in the ground, which is what IOC has always been about--never current earnings.
Negative Searching Alpha articles always have some negative effect on the IOC pps, and the one from Whitney Tilson today had a particularly negative effect, given that he is Mr. Papa Bear. He chose this moment to pile on and tout his bear case, lest yesterday's bounce continue. I congratulate him on his success, just as I congratulated him on the big drop in the stock on Friday. For the moment there is a tremendous argument going on regarding whether the "deal" was a good or bad one for IOC. In terms of its effect on the pps there is no question that the "glass is half empty" (or is it "completely empty"?) is the one that prevails for the IOC longs.
After reflection,though, I have abandoned my initial thought that the huge hit to the stock might bring on a class action suit. Hession never misled us regarding anything factual about the deal that he was working on.
He honestly thinks it is good for the stockholders, and the majority of the analysts(if not 100% of them) seem to agree with him. It is rare that this kind of deal brings such totally differing opinions--between analysts on the one hand and selling stockholders on the other. The heart of it seems to be short term vs. long term. Short term the deal is a disappointment, and the pps result is very negative. Long term, assuming that the future drilling is successful, the results may turn out to be spectacularly successful. Each of us has to decide what kind of investor he is. I'm disappointed short term, but I have held this long(four years) and I can afford to wait a few more.
What kind of a rating do you think Morgan Stanley etc.--- among the investment bankers who helped with this deal---will give to their handiwork? "Strong sell" perhaps?
Did you make any money shorting IOC at the open (pps 86) before it crashed on Friday? As clever as you are I expected a boast to that effect by now.
Now that everyone concerned has had the weekend to ponder the pros and cons of the Friday deal, Monday's stock action should reflect the true value of the deal. Like everyone else I wait to see whether it moves up or down from here. MS was one of the investment bankers involved. Their new write up and target price should be of interest.
Haven't heard from you today. 178,000 shares were traded at 86, before the market was halted and reopened in the 50s. I'm surprised you were not in there shorting at 86, and now boasting your head off about how much money you made today. Must be because you missed your chance. What is your verdict now? Will you be shorting on Monday? Let us know.
But even if you bought in the 20s it has been dead money since 2009. Don't you wish you had taken your profits that year and had invested in something else that has moved up with the market since then?
You bet we were all wrong--some more than others. I did have my suspicions about the 200 plus case and even the 100 plus case because the much maligned "Mr. Market" that I believe in never confirmed anything like those numbers. There was always a disconnect between the extreme optimism and the present market reality. I was roundly criticized for my skepticism, but Wall Street doesn't usually work that way, folks. But I was taken in by Hession's unqualified optimism last Nov. 12, and added to my position. So did a lot of others, judging by the big leap in the pps, and this is why I think Hession and IOC may be liable to a class action suit. I hope not, because these suits, which are supposed to benefit the shareholders, only hurt them by driving the pps even lower. The only winners are the lawyers, and they are insatiable when it comes to feathering their own nests.
I do see the long range potential in the deal (which may save Hession from the law suits), and because I do not invest on margin I can afford to take the long view, and just forget about IOC (if such a thing is possible!) for the next year or so and see what happens. It sure has been the stock from hell, though. Four years of hell! In all my investing career I have never seen anything quite like it for dishing up disappointments to longs!
Actually, I don't, since I am not in IOC heavily enough for it to affect my life style. And I hope Hession does turn out to be right in his optimistic evaluation. But today's action is the kind of thing class action lawyers are always on the alert for. You can bet they are taking a look at it.
Anyone who has held this stock for the last four years as I have would no doubt agree with my designation as "stock from hell."
First off my congratulations to the shorts. You have every right to mock us longs. We were mocking you as recently as yesterday. Congratulations to Whitney Tilson. You stuck by your short guns and you have proved to be dead right. And my puzzlement to RJ with its reiterated 102 target price. I did not find any explanation from them or anyone else as to why millions of shares of IOC were dumped in the 50s. If the stock is really worth twice that why are all of those sellers that dumb? Not usually the case.
I was suspicious of the deal last night. I could not make the math add up to making it anything to write home about. After all, there was only $12 per share being offered up front, and even that not for another month. But I wanted to believe there was something there that I wasn't seeing. After all, hadn't Hesssion waxed eloquent at the Nov. CC about how he was going to increase shareholder value? Surely he knew the score--didn't he?
Even this morning, wasn't he supposed to be "happy" about what he had done? Then came the stock opening and the bombshell plunge. Wall Street gave a resounding thumbs down.
My guess is that the greedy lawyers are going to be all over this with class action suits if there is not an immediate stock rebound, which I don't think will happen. A case can be made that Hession knowingly misled investors when he encouraged us to buy with his optimism at the Nov. CC. Is he so dumb that he could not have known that the deal he was negotiating would kill stockholder value in the short run? And who knows what the deal will accomplish for IOC stockholders over the long run? Wall Street is only interested in the short run, and short run, Hession massively misled us.
If I were "Dr. Mike" I don't think I would sleep any better than his stockholders tonight. In fact, I think he will sleep a lot worse.
Let's assume that trading begins at the same price that it closed last night. Based on what those of you listening to the CC heard, and assuming that you did not already have a position in IOC, how many here would be buyers? And if you did have a position already, how many here would be sellers of your stock?
I'm only looking for responses from those who heard the CC. I did not.
Dunno. I hope you are right about breaking 100,but this stock has a long history of under delivering on Message Board pps expectations. We longs tend to get too enthusiastic most of the time. I'm anxious to hear what Hession has to say at the CC in terms of what this deal means for shareholders like us.