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Joy Global, Inc. Message Board

js291955 111 posts  |  Last Activity: Dec 25, 2014 4:55 AM Member since: May 31, 2009
  • Reply to

    js291955 and others...

    by capitalgainsshouldbe1percent Oct 12, 2014 8:26 AM
    js291955 js291955 Oct 13, 2014 10:04 AM Flag

    Now that I think about it, I'm sure they put up the properties as collateral to make sure they have plenty of cash. It was a smart move by ESI.

  • Reply to

    js291955 and others...

    by capitalgainsshouldbe1percent Oct 12, 2014 8:26 AM
    js291955 js291955 Oct 13, 2014 9:54 AM Flag

    The Letter of Credit to the DOE is $80 million. So what that means is that:

    1) ESI did not have $80 million in cash to use as collateral,

    OR

    2) maybe they wanted to preserve their cash and put the properties up as collateral. The properties would certainly cover the Letter of Credit because they are worth close to $200 million. The properties themselves are good collateral. There's no need to sell them.

    I'm betting on number 2)

  • Reply to

    js291955 and others...

    by capitalgainsshouldbe1percent Oct 12, 2014 8:26 AM
    js291955 js291955 Oct 13, 2014 9:11 AM Flag

    Capital,
    ESI cannot sell/leaseback their properties because the properties are pledged as collateral to the banks.

    Here's a Q&A I had with ESI IR:

    1) Question: Can you tell me if you are still actively pursuing a sale/leaseback of your real estate properties?

    Answer: We have stated publicly that we feel there are more efficient ways to generate liquidity with respect to our real property than sale/leaseback transactions. So that is not the priority at this time

    2) Question: Is it still possible for you to implement this strategy or are the banks holding mortgages on your properties and you are not allowed at this time to pursue a sale/leaseback strategy.

    Answer: As disclosed in the recent 8-k filings, the real estate does now serve a security under the amended credit agreement.

  • js291955 js291955 Oct 12, 2014 12:01 AM Flag

    There will be one time losses but to get an accurate baseline PE, you have to back out the one time losses. That means EBITDA will be more important than PE. The amount of cash they have will also be important. The $80 million they are giving the banks for the letter of credit is not spendable cash but it does count when calculating liquidity and leverage metrics. The other important metrics will be new student admissions and student retention rates. These will give us a good idea of how the business is going without all the PEAKS noise.

  • Why are shale plays getting hit so hard?
    The short answer is, because oil is dropping. West Texas Intermediate has gone from $105 to $85 in three months.
    But a large part of the problem has to do with the way shale drilling is financed.
    Let's say you own a shale company and you want to finance drilling a well in, say, the Bakken. You need $10 million (I am just using $10 million as an example). You have a demonstrated reserve value from the well of, say, $20 million.
    Here's how you might finance the $10 million deal. First, get a line of credit from a bank based on the value of the reserves. In turn, the lender becomes a secured creditor. Let's say that based on a value of $20 million, a secured lender is willing to put up $5 million.
    You can fund another $2 million from your own cash flow. Now you have $7 million.
    For the remaining $3 million, you go to the high-yield debt market, which of course is an unsecured creditor.
    Here's what the deal looks like:
    •Secured creditor: $5 million
    •Cash flow: $2 million
    •Unsecured creditor: $3 million (high yield)
    •Total: $10 million
    This is simplified, but you get the point.
    Now, let's look at what happens when oil starts to drop fast, which is exactly our scenario.
    That secured creditor with the line of credit? He's getting nervous, because now instead of reserves worth $20 million for your project, those reserves are now worth only, say, $16 million.
    That's a problem. The line of credit you will be able to get will drop because as the price of oil drops banks don't want to lend as much
    So, instead of $5 million, your secured creditor will only lend $4 million, and at a higher rate. Now you need $6 million more.
    Another problem: because the price of oil is down, you can't contribute as much from your cash flow, so instead of $2 million that you contribute, you can only contribute $1 million.
    That's $5 million total. You still need another $5 million, and now you have to go to the high-yield market.
    Except th

  • A lot of rigs will shut down. NES will plummet. It's shocking that NES is still above $10. Stiefel Nicholas stuck their neck out and it's surprising if anyone listens to them ever again. So much for BOLD price targets. Fools.

  • js291955 js291955 Oct 10, 2014 6:31 AM Flag

    I think it's ESI's time to torture the shorts. Here what I'd like to see:

    Friday morning: ESI issues a press release that says:

    "ESI is pleased to announce that financial statements for 2013 and the first half of 2014 are complete. It's been a long process and we apologize to shareholders for the length of time it took to complete. We are confident that ESI shareholders will be very pleased with our financial statements which will be released on Monday, October 13th."

    The effect on shorts would be hilarious. I hope management still has a sense of humor!

  • tdr has it right. More than 150% of the float has changed hands over the last 20 days. Officially the float is 16 million. A large percentage of floating shares have shifted into stronger hands. Since most longs are holding for better days, a small rally turns into a big rally as shorts' losses mount. On the other hand...

    I can't help thinking that this rally started because someone (or more than one) who bought shares today was leaked information that will come public very soon. Maybe Friday morning but certainly by Monday morning. The banks set a deadline on October 15th for the 2013 financial statements and Q1 2014 statements. I believe we'll see these statements on Friday or Monday.

    The other driver for this rally is that shorts don't want to get caught short going into Monday. Expect a strong Friday.

    A couple of days ago I noticed that someone bought 500 strike price $5 call options at 11 cents (now worth 60 cents!!). At the time I thought "someone knows something" but I didn't follow their lead. Too bad for me but my long position is doing well and well, it's going to get better.

    Short interest as of 9/15 was 11 million shares. Rocket fuel!

  • js291955 js291955 Oct 9, 2014 7:52 PM Flag

    and that includes Trump University!

    In 2005, Trump opened Trump University, a for-profit but non-accredited school where he would bestow his industry expertise upon the masses — aka anyone who forked over $35,000. That same year, he licensed his name to an affiliate program called the Trump Institute.

    In 2010, four students sued the "university" for "offering classes that amounted to
    extended 'infomercials,' 'selling non-accredited products,' and 'taking advantage of these troubled economic times to prey on consumer's fears.'"

    The "university" then changed its name to "The Trump Entrepreneur Initiative."

    And in 2013, the New York Attorney General Eric Schneiderman sued Trump and Trump University for allegedly defrauding students.

    The business officially ended operations in 2011.

    Trump compared his ideas to Einstein's in the "Trump University Entrepreneurship 101" official book: "Albert Einstein believed that a 'Theory of Everything' in physics unified the four primal forces of nature: gravity, strong nuclear force, weak nuclear force, and electromagnetic force. Our unifying theory for sustainable success in business is so much simpler. [...] The Customer Is Everything!"

    What Trump said about Trump University: "I went to the Wharton School of Finance ... I have a great feeling for education and for knowledge and learning … I love the idea of helping people, because I’ve had a lot of experience with real estate, to put it mildly."

  • Answer: Neither. For the last 10 trading days, ESI has tracked the Russel 2000. Plot it! ESI is in the Russel 2000 so when investors or traders BUY the Russel 2000, they are buying ESI. When investors and traders SELL the Russel 2000, they are selling ESI.

    Esi longs and shorts trading volume is small compared to the Russel 2000.

    This will change when we get news.

  • js291955 js291955 Oct 7, 2014 3:20 AM Flag

    It's in my recent post: "Shorts hope that ESI can't provide financial reports by October 15th and October 31st". This info is taken from the Sept. 15th 8-K. I'm glad you asked me about this because I just realized that Yahoo didn't include this information in Yahoo's version of the September 15th Current Report. LL2000, it's UNBELIEVABLE but in Yahoo's version of the September 15th Current Report, the info on the dates ESI is required to submit it's financial reports is not there because Yahoo didn't post the whole section, i.e. Item 1.01. There are just three dots ... to indicate that all the info is not there. If you view the NASDAQ's version of the 8-K, all the info is there! Bottom line for me is that I can't trust Yahoo to publish the whole 8-K.

    I appreciate that you asked me a question about this because I learned a lot. I remember feeling a little confused when I was gathering this info and now I know why!

    I'll repeat it here:

    The audited consolidated balance sheet and related statements of operations, stockholders' equity and cash flows of the Company, and the certificate of a financial officer of the Company as described in Section 5.01(c) of the Credit Agreement, in each case, as of and for the fiscal year ending December 31, 2013, required to be furnished by the Company, are required to be furnished by October 15, 2014, instead of September 15, 2014 (the date established by the Fourth Amendment to Credit Agreement).

    The internally prepared consolidated balance sheet and related statements of operations, stockholders' equity and cash flows of the Company, and the certificate of a financial officer of the Company as described in Section 5.01(c) of the Credit Agreement, in each case, as of and for the fiscal quarter ending March 31, 2014, required to be furnished by the Company, are required to be furnished by October 15, 2014, instead of September 15, 2014 (the date established by the Fourth Amendment to Credit Agreement).

  • js291955 js291955 Oct 6, 2014 8:25 PM Flag

    They'd better hurry. The deadline is next Wednesday, October 15th.

  • have been taken from ESI's September 19th 8-K.

    Chances of "Shorts hopes":

    Shorts hope that the DOE Letter of Credit will have a material adverse effect on ESI (5%)
    Shorts hope that ESI can't submit an $80 million Letter of Credit to the DOE before Nov. 4th (0%)
    Shorts hope the SEC issues ESI a cease and desist order or a punitive injunction (0%)
    Shorts hope that ESI gets delisted (0%)
    Shorts hope that ESI can't provide financial reports by October 15th and October 31st (5%)
    Shorts hope that ESI can't get a financial advisor (0%)

    Hope is all the shorts have to hold onto.

  • The sanctions imposed on the Company by the ED described above could have a material adverse effect on the Company’s financial condition, results of operations, cash flows and ability to meet its contractual and regulatory obligations. Further, there can be no assurance that the Company will be able to submit the ED Letter of Credit in the amount and for the term required by the ED, that the Company will be able to provide the cash collateral required to maintain the ED Letter of Credit or that the Company will be able to obtain any required annual increases in the amount of the ED Letter of Credit. The Company’s provision of the cash required under the Credit Agreement to collateralize the ED Letter of Credit will have a material adverse effect on the Company’s liquidity, and will significantly reduce the amount of cash that it will have available for other purposes, including to satisfy its future payment obligations under the guarantee arrangements related to the two private education loan programs to which it is subject. The fact that a significant amount of the Company’s cash will be held in connection with the ED Letter of Credit could also negatively affect the Company’s ability to satisfy the financial metrics of the ED, state education and professional licensing authorities and the accrediting commissions that accredit the Company’s institutions.

  • The Company is required to submit the ED Letter of Credit on or before November 4, 2014. The term of the ED Letter of Credit must be for a period that ends on November 4, 2019. The Company will be required to adjust the amount of the ED Letter of Credit annually to 10% of the Title IV Program funds received by its institutions in the immediately preceding fiscal year. The ED may terminate the Company’s institutions’ eligibility to participate in Title IV Programs, which would have a material adverse effect on the Company’s business, financial condition, results of operations and cash flows, if the Company fails to:

    submit an irrevocable letter of credit payable to the ED in the required amount and for the appropriate term on or before November 4, 2014 or annually adjust the amount of the ED Letter of Credit to the appropriate amount.

  • As previously disclosed, the Company has been subject to an investigation by the U.S. Securities and Exchange Commission (the SEC) concerning two private education loan programs for its students. On August 7, 2014, the Company received a notice from the staff of the Division of Enforcement (the “Staff”) of the SEC, notifying the Company that the Staff had made a preliminary determination to recommend that the SEC file an enforcement action against the Company (a “Wells Notice”). According to the Staff, the enforcement action would allege violations of Sections 10(b), 13(a) and 13(b)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act” ), and Rules 10b-5, 12b-20, 13a-1, 13a-11, 13a-13 and 13a-15 under the Exchange Act.

    The SEC’s notice said that the Staff’s recommendation may:
    involve a civil injunctive action, public administrative proceeding and/or cease-and-desist proceeding against us; and seek remedies that include an injunction, a cease-and-desist order and monetary relief, including civil monetary penalties.

  • On September 18, 2014, the Company was notified by the NYSE that the NYSE has granted the Company’s request for a listing extension through November 15, 2014. The Company understands that the extension is subject to reassessment by the NYSE on an ongoing basis. The Company is working diligently to complete the 2013 Form 10-K and file it as soon as practicable. Due to the uncertainty with respect to the timing of the completion of the necessary reviews and analyses, however, there can be no assurance that the Company will be able to file the 2013 Form 10-K within the extended cure period.

  • The audited consolidated balance sheet and related statements of operations, stockholders' equity and cash flows of the Company, and the certificate of a financial officer of the Company as described in Section 5.01(c) of the Credit Agreement, in each case, as of and for the fiscal year ending December 31, 2013, required to be furnished by the Company, are required to be furnished by October 15, 2014, instead of September 15, 2014 (the date established by the Fourth Amendment to Credit Agreement).

    The internally prepared consolidated balance sheet and related statements of operations, stockholders' equity and cash flows of the Company, and the certificate of a financial officer of the Company as described in Section 5.01(c) of the Credit Agreement, in each case, as of and for the fiscal quarter ending March 31, 2014, required to be furnished by the Company, are required to be furnished by October 15, 2014, instead of September 15, 2014 (the date established by the Fourth Amendment to Credit Agreement).

    The internally prepared consolidated balance sheet and related statements of operations, stockholders' equity and cash flows of the Company, and the certificate of a financial officer of the Company as described in Section 5.01(c) of the Credit Agreement, in each case, as of and for the fiscal quarter ending June 30, 2014, required to be furnished by the Company, are required to be furnished by October 31, 2014, instead of September 30, 2014 (the date established by the Fourth Amendment).

  • Prior to November 15, 2014 (or another date not later than December 15, 2014, if acceptable to the
    administrative agent), the Company must retain a financial advisor acceptable to the administrative agent. Based on its discussions with the administrative agent, the Company understands that the financial advisor would be retained to assist the Company in its ongoing efforts to identify and secure alternative financing. Additional Covenant of the Borrower. Prior to November 15, 2014 (or such later date (not to exceed December 15, 2014) as is acceptable to the Administrative Agent), the Borrower shall retain a financial advisor acceptable to the Administrative Agent, which engagement shall be pursuant to terms and subject to a scope of work acceptable to the Borrower and the Administrative Agent. The Borrower further agrees and acknowledges that the failure to comply with this Section 5 shall constitute an Event of Default.

    Likelihood of failing to get financial advisor: 5%

  • WASHINGTON, Oct 2 (Reuters) - A federal judge ruled in favor of for-profit colleges and universities on Thursday, overturning a U.S. Department of Education rule that limits how the schools recruit students.
    Judge Rosemary Collyer of Washington, D.C. District Court said the agency failed to explain why it banned the schools from offering bonuses to recruiters based on the number of students they enroll who graduate. The court asked the Department to amend the rule.

    For-profit colleges have come under scrutiny from the Obama administration and Democrats in Congress for the amount of debt accrued by their students, the majority of whom receive financial aid from the federal government.

    Former students have testified before Congress that they were misled by for-profit college recruiters who inflated future job prospects and earning potential.

    The Obama administration responded in 2013 by prohibiting schools from offering bonuses to recruiters for their performance, including the number of enrollees who graduate.

    The Association of Private Sector Colleges and Universities, the largest membership organization of for-profit colleges, sued the Department of Education in February over the rule.

    In a statement issued after Thursday's ruling, the group's general counsel, Sally Stroup, said the Department should "correct its errors by suspending the flawed regulations and engaging in a new rulemaking."
    In court papers, the Department of Education argued that giving incentives to recruiters for the number of enrollees who graduate would indirectly lead them to push too aggressively because enrollment is the "necessary preliminary step" toward graduation.

    A federal appeals court previously found the ban on graduation-based compensation was arbitrary and ruled that it should be overturned absent a better explanation from the agency. In her written opinion, Judge Collyer said the Department had failed to give a better reason for the ban than it did in the previous case.

JOY
48.72+0.49(+1.02%)Dec 26 4:05 PMEST

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