Because BTU must pay an exorbitant amount of interest on it's debt BTU is left out of the biggest game on Wall Street which is corporations borrowing cheaply and using those IOUs to fund dividends and buy back their stock. Quite the Ponzi Scheme if you have investment grade credit, unfortunately BTU's debt is rated five grades below investment grade. I guess in a way it is a good thing longer term, BTU is not leveraging up it's balance sheet accumulating debt to temporarily push their stock price higher, pay dividends.
Over the years I have made a lot of money doing the opposite of the bald avenger.
Shell is getting access to huge proven reserves off the coast of Brazil at a substantial discount to what RDS would cough up if they were to develop internally (About $21 a barrel) and they become the largest LNG player in Asia. This has the potential to be a huge win for RDS and worth buying at these levels. If RDS goes down from here it is not about this being a bad acquisition it is all about a further long-term fall in the price of oil and nat gas.
This seems inevitable considering the rising costs to develop proven reserves internally, the question does XOM gamble for a lower price and wait?
Oil majors ramping up LNG investments, Shell purchases BG for $70 billion becomes largest LNG player in the world. Capital moving into this sector big time, when the infrastructure is in place, cleaner, relatively cheap LNG will supply the emerging markets, coal is dead! Act appropriately and sell BTU.
Par for the course for the dimwitted RDS executives. Shareholders get royally screwed!
$45 billion!!! Cash Flow will not be there to finance the purchase plus pay a 5.7% dividend. Borrowing costs for fossil fuel companies are not cheap in today's market.
You have a real penchant for being painfully wrong summer...300 down?
You can try to dance around this all you like summerwind but on March 31, 2015 a mere three days prior to the date you posted "Glad I Got Out!" you posted..."Feeling very confident BTU under 5 and it is in my long term account. Upside plus divi reinstatement after the election. I can wait. A pure gift and all short should of covered but their greed didn't allow them to". If these highly contradictory proclamations do not make you a hypocrite then I don't know what possibly could! Keep changing your tune and placing your bets, you are clueless.
In your long-term account? Is that why you held the stock for two days before posting "Glad I sold". What an airhead.
summerwind-57 you have zero credibility. You change your tune every other day. So much for your window dressing theory and your bonehead bets gone wrong.
One huge problem with the article you quote...Sterne Agee & Leach have been saying the entire coal sector has been way oversold and a "Buy" for the past 3 years!!! They have been as painfully wrong as Finster! Another words, if you have been buying into Sterne Agee and Leach's bonehead logic and "Buy" calls related to the coal industry you have lost a lot of money.
Now, now Finster...If I had been a passenger on that fateful flight, you would of lost the one person in your life who diligently reveals the many errors of your ways. Now that would of been truly a tragedy to allow someone of your ilk to post nonsense daily without a good Samaritan such as myself to take on the duty of exposing your buffoonery. Yes it is incredibly taxing reading your incredibly inane commentary but I owe it to the BTU message board community to dissect and critique your drivel so no poor soul were to make the colossal mistake of relying on your foolishness in determining their investment choices.
Don't expect an apology for her buffoonery.
Nice all candy! Put those critical thinking skills of yours to work I see. My how you changed your tune!
Obviously you must be one of those ignorant fox news watching republicans who could care less about the health and future of our children to make such a witless statement. But no surprise eyecandy you were the same fool buying BTU at high much loftier levels while I stated repeatedly BTU was heading south. Now you have the audacity to boast "Glad" you sold! Enjoy your losses, but please, if you are clueless to what you speak please refrain from posting.
Well you lost the first part of your wager and my guess is you will lose big on the second part also.
I see quite a few republican fanatics blaming Obama or the Greenies for the demise of BTU, then we have the misguided souls who truly believe the longer-term fundamentals for coal remain in place and view BTU as a screaming buy at these levels. There is zero hope for the delusional former but those who fall into the latter may I suggest you rethink your erroneous point of view.
BTU presently has a market cap of approximately $1 billion, debt of over $6 billion, enduring large quarterly losses, it's debt labelled five grades below investment, forced to pay close to 10% on it short-term IOU obligations. This is a profile of a company in serious trouble. BTU's only saving grace is it is somewhat hedged for the remainder of the year.
One must comprehend the glut of coal globally is well beyond crude and nat gas and that huge glut will persist as a slew of deeply bankrupt coal companies continue to produce coal below cost, ironically because it is cheaper than closing it's doors.
It is well known the decline in coal usage in the U.S. has been in a slow death spiral for quite some time and will continue as green energy, nat gas take the reins. This leaves the hopes and future of BTU with the emerging markets. A number of major problems with this scenario, the two largest players, India and China have recently mandated they will develop their own large coal reserves in the coming years and reduce foreign imports. Add to this reality that China has recently embarked on cleaning it's poisonous air, announcing they will close it's four largest coal plants in the not too distant future. One can easily decipher none of this is good for a leveraged BTU.
Finally from purely an environmental point, coal no longer makes sense, the world can no longer afford to subsidize black death any longer. From man-made global warming, to mercury, deadly heavy metals, endless list of poisonous particulates, to toxic coal ash deposits, the costs have long outweighed the benefits.