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Affymax, Inc. Message Board

jagan1961 888 posts  |  Last Activity: 21 hours ago Member since: Oct 31, 1999
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  • Reply to

    Breitburn is a nightmare investment

    by adrianwdavis Jun 24, 2016 6:47 PM
    jagan1961 jagan1961 21 hours ago Flag

    I've been saying from day one of filing ch11, instead of holding/buying commons buy some cheap preferreds while it was under 40-50 cents. Now this preferreds are being bought by big boyz.

    Sentiment: Strong Buy

  • Reply to

    Breitburn is a nightmare investment

    by adrianwdavis Jun 24, 2016 6:47 PM
    jagan1961 jagan1961 23 hours ago Flag

    Any investment in a Ch 11 entity is a risky investment. This is the basic investment theory, you should just buy some Mutual funds and live with it.

    GL!

    Sentiment: Strong Buy

  • However during Ch 11, there is no proper price discovery. One needs to wait it out for the real reorg plan.

    At this juncture no one knows.

    GL!

    Sentiment: Strong Buy

  • Reply to

    2,377,615,000=

    by jacobcanuck Jun 23, 2016 8:01 PM
    jagan1961 jagan1961 Jun 23, 2016 8:19 PM Flag

    I agree with you the commons can't be wiped out and more over how anyone (bond holders) would like to take a cut? Howe EIG will allow a 380 MLN $ write off for their 1 year old preferreds?

    All in all, I expect some write off for the losses and reorg which might take out a maximum of $200 MLN from the Common equity leaving around $400 Mln which is around $2 per share.

    2020/22 bonds and Prefereds can convert to Equity based on the Equity valuation @2 per share, (issuing 650 MLN for Bonds and 300 MLN for Prefered holders) leaving the equity intact.

    This will eliminate 200+ MLN annual interest payments. They can sell off non-core assets for 500-600 MLN to payoff part of WFC revolver. There is no need for Lazard and 30 MLN payout.

    With the Oil price moving up, with the Asset prices improving they can meaningfully manage and pay a decent payout.

    GL!

    Sentiment: Strong Buy

  • Reply to

    almost $3 million in bids now for Breitburn notes

    by m20m75ph Jun 23, 2016 11:10 AM
    jagan1961 jagan1961 Jun 23, 2016 6:22 PM Flag

    It never to went to 5 cents, it was around 5.5 cents was the lowest and there were only couple of trades. 1.2 BLN worth of Bonds, I don't know how many trades were below 20 cents. Those who bought @5-10 cents many might have already sold.
    On the Prefereds I suspect there is a huge Short position, let us see how this moves. Probably the Bond holders (not EIG) might have sold short, without realizing there are only 8 MLN to go around.

    GL!

    Sentiment: Strong Buy

  • Reply to

    bbppq down yesterday

    by zooplankton200 Jun 22, 2016 7:42 AM
    jagan1961 jagan1961 Jun 22, 2016 6:16 PM Flag

    380 MLN $ for anyone is not CHUMP Change including EIG to write it off.

    Overall the equity issuance since inception of BBEP is around $5 BLN. Not everything bought at the peak price of Oil, staggered purchase over a 10 year period.

    Yes the Oil price is depressed, it is bound to move up. I'm not in zoop's negative mindset, at the end of the day everyone will have something and there can't be any Debt write off at this juncture, since the Debt is not held by one or few entities, rather held by many mom and pops.

    The Equity sell off from insiders may be due to Conflict of Interest too.

    CODI will arise when the Bondholders willing to take a Cut, why would anyone take a Cut right now, it can be a conversion to Equity in that event there is no CODI effect.

    However when Prefereds are trading @2 cents on the $, why would anyone in the right mind will hold commons, that is the only question. If the prefereds stays above $1 and equity still stays @5 cents, it is worth holding common units. Even in an exchange, prefereds Cumulative interest should be taken into account.

    GL!

    Sentiment: Strong Buy

  • Reply to

    bbppq down yesterday

    by zooplankton200 Jun 22, 2016 7:42 AM
    jagan1961 jagan1961 Jun 22, 2016 5:36 PM Flag

    fred: while in BK, there is no real price Discovery, it just trades arbitrarily.

    First of all BBEP bonds even while on Investment grade used to trade very thin. Now 95% of the institutional folks can't buy and some of them has to sell which already occurred. Some distressed funds bought them at 10-12 cents.

    The prefereds were trading @5+ even when the Dividends are deferred.

    GL!

    Sentiment: Hold

  • Reply to

    bbppq down yesterday

    by zooplankton200 Jun 22, 2016 7:42 AM
    jagan1961 jagan1961 Jun 22, 2016 5:28 PM Flag

    The issue here is, 375 MLN of EIG prefereds which are at lower stack than 'A' prefereds (listed ones). In fact EIG is taking interest of Kind (that means they got more prefereds than actual cash) from 350 MLN it went to 380 MLN.

    2020/22 Bonds 1.2 BLN worth is trading very thin. Even if they up the price to 40 cents, hardly they can get 100 MLN. Majority of 1.2 BLN Bonds is with others not EIG.

    EIG's Sr.notes are next to Banks which are very secured. I don't know how much of Series 'A' preferreds EIG owns buying from the market.

    I don't think EIG will take a 380 MLN $ cut for some future windfall on their B series.

    I don't think any 2020/22 Bondholders will accept any Cut now. As an individual investor you can't buy any bond now, there are no Asks. You can sell if you want to.

    Even the Management used to own Series 'A' preferreds, unsure whether they got out or still holding.

    We will have to wait!

    GL!

    Sentiment: Hold

  • Bonds Moved up to 20 cents
    Prefereds moving up slow and steady
    Common will move but unsure why folks are hanging in with Commons instead of taking the risk with the Prefereds which are still cheap @50 cents for $25 + cumulative interest.

    If Common moves to $1, the prefereds will definitely move past 10+

    GL!

    Sentiment: Strong Buy

  • jagan1961 jagan1961 Jun 17, 2016 2:54 PM Flag

    I'm very hopeful someone buying them out, once the Equity committee formed. Hope the Judge allows it to go thru.

    If there is no compromise from the Unsecured BOnd holders, there is no CODI.

    Why would the Unsecured Bondholders accepts less than 100 cents, when the Oil price has crept up by 60% and it is going to move up to 70-75$ per bbl, since the drilling activity has stopped 100%.

    With the problems WW the property within US is a premium one. Right now it is absolutely essential for the bigger players to get these type of secured assets.

    GL!

    Sentiment: Strong Buy

  • With the way it has traded after Ch 11 filing, I suspect huge short interest is created.

    The Problem for shorts is that, there are only 8 MLN shares to go around and it is above/senior to EIG 'B' preferred in payout deck next to Unsecured NOTES (2020/22)

    GL!

    Sentiment: Strong Buy

  • They raised over 5 BLN $ of equity during the past 10 years and added assets over the course of 10 years.

    The debt $3 BLN +550 MLN of Preferreds is nothing for a company with reserves 310+ MLN BBLS (Due to price they wrote off 70+ MLN BBLS) Total 240+70= 310 MLN BBLS.

    With 55000 BBLS daily production (Flowing BBLS is calculated btw $30000 per bbl to $60000 bbl) (Read their PR regarding acquisition - BBEP purchased one Florida property @60000 $ per flowing bbl along with a value for the reserves)

    They have assets worth close to 7.5-8 BLN $, for anyone to takeover the property @4+ Bln is easy and will be done soon.

    GL!

    Sentiment: Strong Buy

  • jagan1961 jagan1961 Jun 17, 2016 10:34 AM Flag

    EIG has indirect ownership thru their 370 MLN $ investments in Preferred 'B' Shares.

    'A' preferred shares are senior to 'B' Series.

    GL!

    Sentiment: Strong Buy

  • That is the way the BK stocks trade. In FMNTQ there was no assets except NOL's of 800 MLN.

    Here we have audited Assets of 1.3 BLN.

    Every BK stock has risks, however there is so much manipulation.
    They filed Ch 11 definitely in this case, to create panic and steal assets from Stock holders and Bond holders.

    GL!

    Sentiment: Strong Buy

  • That is only way a price discovery will happen. The restructuring will not happen since there is NOTHING TO RESTRUCTURE.

    Why would the BOnd holders reduce their FV of their Bonds? Being an MLP they can't write off Assets due to huge IRS tax implications.

    Yes, they can account for Restructuring charges and this qtr losses may be around 100-200 MLN, still leaves around 400 MLN of Equity, leaving $2 per share.

    Only thing they could do is to convert 2020/22 and preferred equity to the current equity valuation and do a proportional allocation of Equity for each class. This will eliminate 1.8 BLN Worth of Debt, close to 200 MLN $ of Interest portion annually.

    GL!

    Sentiment: Strong Buy

  • jagan1961 jagan1961 Jun 15, 2016 2:48 PM Flag

    As long as "reasonableness" in EC formation the Trustee go ahead and request. We can't imagine anything, only what the company has stated, in this instance 1.3 BLN $ equity is stated and Reserve Valuation btw 12/31 5/31 has vastly improved, that is what needed.

    GL!

    Sentiment: Strong Buy

  • That is how the value of Oil assets moved up. Today someone can scoop up the assets of BBEP at or near BV, which will get close to $2+ to Common shareholders and 100% to all other classes.

    As I said many times, the Court will ask the Management to sell the Company and Invite Bidders, once that is done, no one can turn the Clock back. BBEP will be sold to the highest bidder.

    Every biggie in the Industry knew, how difficult it is to consolidate assets even when they have money, here you have a 55000 BBLS producing assets available at or near BV and that too after a deep write off of 2.5 BLN!

    GL!

    Sentiment: Strong Buy

  • With millions of Common Units and Preferred shares shorted and hope for a Possible sale of BBEP for the right bidder Odds are in favor for Longs, shorts will soon realize and go to panic mode to cover.

    It is the pay back time.

    GL!

    Sentiment: Strong Buy

  • They sold Preferred shares as if this is going to zero. Now they will have to cover and if you OWN preferred shares, Just tuck it under your mattress, it has the HUGE POTENTIAL and you should be able to recover $25 + Accumulated interests in a SALE. That is 65 X the current Ask price.

    Only 8 MLN Shares to go around, the selling is done only by Short sellers not by the Individual investors.

    Just Hang in tight with your shares, this is one of the Great opportunity.

    GL!

    Sentiment: Strong Buy

  • Reply to

    JMHO one should accumulate as much as they can!

    by jagan1961 Jun 15, 2016 10:32 AM
    jagan1961 jagan1961 Jun 15, 2016 11:05 AM Flag

    Buy and wait till the final outcome. Now the Court started the deliberations and possibly a EC will be formed. The assets are Huge and they already took a deep discount write off.

    Oil has gone up by 60% and so do the Valuation.

    It was around $3, we might receive a BID for the BV by some bigger players soon, it is way cheap for an acquirer even buying at these book value.

    BBEP Spent considerable amount of Time, money (besides Debt, 5 BLN $ worth of COmmon and Preferred equities were sold to investors) to acquire these assets.

    The Asset base is HUGE and will satisfy every class, SALE OF THE COMPANY is the ONLY OPTION here.

    GL!

    Sentiment: Strong Buy

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