Canaccord VERY likely bought either the common or the convert...they WILL HAVE a large piece of inventory to sell on their Buy recommendation......jmho
"Can we see the calculation on the 30% dilution number???"
167million outstanding.....offering 35 million plus potential over allotment of 5.25 million......convertible will add a potential of 25.6 million+/-.....bringing a potential total dilution an additional 65.85 million shares...so actually I short-changed the potential dilution at 30%...it is more like 39%....
"with oil rebounding to $70 by year end, WLL be be at $50-$60"
....while that MIGHT have been the case last week, now you have a different ball game. About 30+% dilution of the common stock, that puts the stock around $40/share +/- a few dollars even with oil @ $70, with the likely scenario of more financial problems occurring.
I will be very wary of ANY Buy recommendations coming from ANY of the brokers or investment banks going forward. They will have taken part in the recent offerings and will most assuredly have inventory they want to unload at a profit....jmho
....these offerings have bought WLL a little bit of time. The FACT is the current management has displayed its arrogance and incompetence with an ill-fated buyout that has put the existence of the company at risk and forced the dilutive offerings. Granted,management has certainly been adept at "production" but has proven totally inadequate at "management".
The stock now has very limited upside potential with massive downside probability. The upside is capped by the convertible and the downside is made highly probable by the current production/price of oil.
The company could raise more cash by selling assets, assets which are now impaired by the price of oil, all of which will merely buy some time. Only reason to go long now is to cover a short position. There is little reason to believe the company will do little more than run in place and more reason to believe they will lag behind the rest of the industry.
IF they continue to explore the sale of the company I doubt they could fetch more than $40/share and that would likely occur when they stock is further discounted, likely from the low $20/share area.
Better places for money than WLL .... of course..... jmho
.... the current day equivalent of ENRON......potentially something more than mere management incompetence at work here with subsequent complicity of the investment bank .....there is potential for fraud written all over the buyout rumor just before the current offerings. Class action ? This might be more along criminal lines than civil. Of course just an opinion here but the train of events is very, very suspicious.
......the stock and debt offering is a clear demonstration of panic in the board room. Not only was the suggestion of selling the company a ruse to suck in the ill informed, the type of deal being done ie. the convertible note is clearly a being done to sweeten the pot for investment bankers. This is not what a corporation does when they are in a position of strength...it clearly demonstrates the exact opposite.
Of course we(retail) don't yet know the final terms of the deal BUT if the conversion feature of the convertible note is not at a premium to TODAY's closing stock price you can safely bet the common will be going lower. A lot lower. Some have suggested the low 20's or mid-teens are very likely. I would agree.
At this point I doubt $70-$80 oil will bring the stock much higher than $50/share, neither in the near nor distant future.
Today's events are truly a disaster for the stock and an indication of the arrogance and incompetence of the current management with regards to managing the company. jmho
...35million shares + 5.25 million over allotment (wishful thinking) + $1billion in Convertible Notes......if WLL was a short seller's dream before it is now a short seller's playground, truly a printing press for those in the know. The common stockholder( all except for upper management who will likely receive tidy and bountiful options) will be raked over the coals for years to come by this financial screwing. Truly corporate management and Wall Street at its most cynical and worst.
" in as much that programmed or high frequency trading does follow technical indicators."
Count....I don't know the extent HFT affects a stock regarding Technical Indicators. I get the sense HFT is much more granular than that. However, the program trading aspect is certainly in effect, both the programming of trading computers and traders themselves. The "markets" are truly cynical and insidious places now-a-days. At least 30 years and back there was a human element of judgement involved. Stocks or other assets were traded on real world economics. Today it seems as though the algorithms are in control and the asset values are ALL relative to what a computer model says they should be in relation to all other assets. In any event, for short term trading the "technicals" appear to be in control with fundamentals given second or even third place. What is a financial asset worth? What ever the controlling money says it is worth at any given moment based on little more than the whim of the moment. jmho
..excuse me....breakout point was more like 48.20....200dma is around 47.05....so hopefully the 50dma will show good support, then next probability is 48.20......downside volume is concerning as well....if this stays down the reason (excuse) will show itself after the fact. Of course none of the selling traders have any inside information, that would be...well....illegal, but we will find out the reason for the fall eventually......jmho
"anyone know why mosaic is so weak" Terribly frustrating but the only thing I see is technical in nature...the stock broke below its 10dma at 53 and is now heading directly for the 50dma at 49.05.....hopefully it won't get all the way down there but that is the first strong support. The next point is from where it broke out at 47.05.
So far there appears to be NO institutional support which bodes ill going forward. I would have thought someone would have stepped in around 51, but obviously did not happen. While this is essentially a commodity stock, nowadays most stocks act like commodities. Such is the nature of our markets. ...jmho
"Do you NOT consider $135 million a lot of debt, especially with oil in the crapper and margins low?"
Ethanol is , unfortunately , a mandated additive to gasoline. PEIX should be able to sell ALL it can produce. What they don't make in margins they will make up in volume , the debt will not be a big issue over time.
Like it or not, believe it or not, today is the first I have posted on this board.