They won't make the payment - they will take the same path as SFYWQ (old SFY). They will file for Chapter 11 and go for a Debt for Equity swap. That's my opinion.
I call my broker and they gave me the BK Agent phone number: 888-251-2764.
Bottom line - you don't have to do anything if you want your current shares to be converted to the new company shares. If you want to opt out then you have to tell your broker that you are opting out of the new distribution and get nothing. I asked why would you opt out, his response would be if you would only opt out if you don't want to give up your rights to sue/etc.
If you do nothing - you will get new company shares.
If you want nothing and want to sue the company, than you need to contact your broker and tell them you want to opt-out.
So do nothing - and get new shares. Simple as money for nothing and chicks for free.
SD will play the same game as SFY who hire Lazard to help them with Strategic Financial Structure. SD won't pay, they will go to the last day then file for Chapter 11 to negotiate a Debt for Equity Swap.
You can argue whatever you want but this seems to be the play of day in the overleveraged E&P companies.
I wish I knew the answer. The question is what will the 4% equity in the new company be worth. I have bought 30,000s at around .06 price - I'll see what happens.
sd, can you share your research - I must agree, I don't have time to read the 100 pages - I get 300 emails a day in my job. Would appreciate your findings.
Here is my view: if Equity is going to carve out 4%, Mgt carves out 5%, and there is ~900M in debt holders. Then every depends on the Enterprise Value / # of Share (obvious), but number of share - do you take the:
Debt + 9% of Debt for the Equity Position / # of Shares Offered?
Volume is down to almost zero. I wondering what the major holders are thinking - when they invested, the stock was going for 9-15+ bucks. So is everyone just waiting?
Based on the price increases - some of the larger holders may be doing their new stock value calc's which is taking advantage of the low prices of the current stock.
What about the major institutional holders:
Fidelity Mgt 13.9% 6.19M
Schneider Capital 3.7% 1.66M
Vanguard Group 3.3% 1.48M
California Public 3.1% 1.36M
TPH Asst Mgt 2.5% 1.12M
I believe the still need Approval by the Federal Government owning the land - they have to approve the transfer of ownership. After that I think they are paying down their $300m credit line plus some hold back for drilling
There are a lot of institutional holders - and is everyone just waiting?
Crabby are you buying or holding - I'm holding and at this price level, I'm thinking of taking the minor risk to pick up more. At 4% Equity in new company there should be some significant upward opportunity.
I'm with the two of you - at 6 cents - I bought a 41,000s lottery ticket. Worst case is I lose one vacation worth of my life. Best case - I make some money.
I'm hoping we get a pop when/if they close on the Asset sales tomorrow.
Question - I'm seeing three different symbols -
SFY# - first one with a low number of shares,
SFY## - with ~5.4X the SFY#
SFY## - same ~5.4X the SFY#
So not clear if the SFY## are 2019/2021 Warrants.
Thanks for the reply. It seems the Message Board has lost sight of the Short situation since the Chapter 11 and your points confirm what I was questioning.
Okay - I need to find where I read that - maybe it is good to go. I'll check - I hope there is no more approvals.