well, tens of thousands, probably many more play FanDuel and Draftkings daily for that amount or less---w/much less favorable odds. I'm not saying i's a good strategy and it's not my cup of tea, but you also need to realize they may be "playing" with 10-20 stocks or more any given day--so the $100s add up if you win a majority of the bets. Is it a fool's game? probably. Do I think it is happening? Absolutely.
The one thing that makes some sense is the pattern of trading which has been in place for a very long time (over a year). Modest to moderate run-ups when there is good news, followed by persistent selling into that news. My guess is that it is simply day traders having a field day since you rarely see hundreds of thousands of shares trade, even on event news, and the largest institutional holders for the most part are standing pat w/their positions. It is just a stock that is really hemmed into lighter volume channel trading until something blockbuster occurs. Of course defining blockbuster only becomes easy after you see it and the stock move significantly higher on say closer to one million shares traded. I am sure the BOD is very frustrated by all of it, but if they could have done something they would have by now. Day traders or someone actively sitting on the stock are the most likely culprits, but I lean toward the former.
I'm not well versed and invest little in biotech or pharma. But I do know that when a game-changing drug that saves or extends life passes phase III clinical tests or gets FDA approval, sometimes the co. whose stock manufacturers it can see its share price move in multi-bagger fashion. I also realize that sometimes those drugs can have severe side-effects, sometime life-threatening but the benefits far outweigh the potential risk. Nonetheless, new boutique law firms spring up daily to address such concerns and you can readily see their television adds multiple times per day. Here you have a process that can save or extend life diagnostically, for which there is no real substitute, and as far as I know there are no side effects--it either works or doesn't. Actually we know Tech-99 works if you can produce it. And the share price moves 5 or 6%.
If it works, partnering while sharing as little equity as possible, would probably be the best alternative if they are unable to grow it to size and spin it off by themselves. Have to get by the "if it works" proposition but they seem to obviously be working down the road favorably on that.
Strange. Figured this news would generate multiple comments and sharply higher trading pre-market on volume. The isotope venture is a binary outcome for them: it works in commercial scale or it doesn't, it has huge impact or it has none, it is a game changer for the company or a non-event. Every indication gets a bit more positive, and yet there is no premarket trade, no comment other than yours, and really no volume at all for a very long time. For some reason press releases and conference presentations only bring out a little bump higher that gets almost immediately sold off on not enough volume to even notice. If this is truly a precursor to a commercial ramp up at even higher rates--- enough to satisfy European and U.S. demands---the stock should move at least $1 per share on high volume. We'll see. Not sure what else the company can do short of delivering actual bottom line results, and I suspect that is what is required. If this works either the market will notice and put value on it or a competitor or diagnostic pharma company will partner or buy it out while it still receives almost no public value (at least in the U.S. stock).
check your math. It's a $9 million credit line max. I think they have only used $5 million so far to take out and retire the previous credit line from the old lender. Ultimately, yes, I expect them to draw the entire line down, but the interest rate would be about 3.5% at today's rates, or a little over $300,000 per year. As of March 31, 2015 they still had $2.5 million cash on the Balance Sheet so it would not be an issue servicing the debt if they could remain cash flow breakeven from operations. Unfortunately, the first quarter was a negative $1 million cash from operations , and the last three quarters have been negative cash from operations. I would also not rule out that the co. dips into the the cash balance as well as the entire line of credit to complete the hotel/resort agenda. I have no argument with the last sentence of your post. The unwind is almost inevitable but will probably take a two-three years. Hypothetically, they could write-off three-quarters of the entire company and still be trading below Book Value. That is not the issue. The assets are only worth something if someone wants to buy them and you have a willing seller. Doubt exists on both counts.
The stock weakness may not reflect the awful recent results. First quarter was awful, but the stock held up even a couple days after that report . My guess is the volume buying reflected some party or parties speculating the CEO might have had enough and would sell the hard assets. When he took out the much bigger line of credit it was clear there was no such intent. In fact, he was doubling down on the hotel-/resort bet, setting up to spend even more than originally planned. I'm sure he figured some would follow him and others would punt, and he could care less about the latter. Those that follow need to consider the timeline. He has committed to spend several million dollars more on the venture. That means realistically no investor will see the fruits of that until at least the seasonally strong period of Q2 2016 (even if he completes the upgrade by yearend 2015). Those results won't be reported until mid-August 2016. That is a very long time to wait in the life of most portfolio managers. Between now and then the company has to navigate four more quarterly reports, the possible writedown of the injection wells, or at least a probable restriction on the deeper well even if it is allowed to resume operations, tax loss selling in the last three months of 2015, portfolio window dressing by institutions in most cases by an Oct 31 fiscal year-end, a seasonally weak 2016 Q1. After all that, an investor has to hope the bet pays off and golf/resort demand increases next year. Make no mistake, this hotel resort deal is a bet-your-company strategy and the CEO is going to spend whatever it takes to complete his vision. His vision is for a year-round resort. However, the big draw is still golf, especially the Pete Dye designed course. In Ohio you can't golf most of December through early April. And the Midwest gets damn hot from mid-June through early September. If I am right and demand only exists in sufficient amounts for maybe five months, I think it's over. It's Ohio.
That seems a little too severe. You would need to see something like another key employee (CEO, CTO, Controller/stand-in CFO proxy) resign together w/a blown quarter---although that did just happen last quarter. Still, it would take something of that magnitude. Of course acquisitions always hold the potential for a negative surprise as this company is well aware historically given its former CBU unit and Forest Products operations. Leaving investors hanging re: the annual dividend is a big mistake. This company has limited visibility as it is, the BOD is already on the thinnest of ice, and credibility has taken a decent hit over the last couple years.. Transparency on the dividend is paramount as that is something the company can control. Apparently they don't care. I'm not sure they would really care if the stock even hit the price you suggest. I'm reasonably sure most of them would be history at the company if that happens. Institutional holders need to speak up and are hopefully doing that behind the scenes and not acting like Reek in GOT.
What about my positive ones? Had takeouts on VIFL, ZRBA, VPF, ROAC, HBE, but most of those posts are of course gone since the companies were acquired. Actually starting to warm to SMIT now after a long period, years in fact, of negative feelings on it. I don't think there is a major turn, but more stability as they have gotten enough remote tank monitoring units in the field to be better able to hold the breakeven point. Not making a big call there, just warming a little as cash flow from operations has stabilized for three consecutive quarters. Sorry, a little OT.
Agree, presentations mean very little except a free meal for the buy-side folk. What would be a catalyst here is one big contract award. They need one, maybe not much more than that, but they need one.
Might be the medicine to resolve the impasse no matter who wins the election next year, instead of patch after patch and kicking the can down the road.
Based on latest management outlook for the core waste business you have to lean more positively on the stock. Visibility is very important for this company, but some will still wait to see actual results.
Death by a thousand cuts is all that remains for shareholders. Hotel/resort in Ohio? Might as well build an Olympic Bobsled Training facility in Death Valley. No one sees this strategy as a bit ill-conceived, really? No one?
"Doomed" is a bit relative, or at least a moot point. It's already down 77% from when the article was written. But to answer, yes. Many, if not most, offshore drillers are doomed.
not sure about that, but hiding from shareholders on the dividend status isn't going to win them the Profiles in Courage Award, or many supporters. Nevertheless the largest institutional holders seem content to get their teeth kicked in again and again, and remain passive and accepting . Hey, it's not their money.
Didn't they have a slide in their presentation material about a commitment to returning cash to shareholders via maintenance of a continuing dividend over the long term? Commitments are funny that way. They just lost $30 million in market capitalization since mid-April, almost one-quarter of the total. They probably can't afford another $1.4 million cash use for a dividend. Maybe shareholders and Street analysts won't even notice. Maybe the Street analysts will maintain their Buy Recommendations if they omit or suspend the dividend.
Klingle left himself open to it. Small float. Big controlling interest held tight. He should have taken it private. Traders are going to destroy this, absolutely destroy it. They can smell blood. A reverse spilt is probably in the offing before the final denouement. But we all know where it is headed. Stevie Wonder can see where it is headed. A resort, in Ohio!, Jumping geezus. "Hey Tom Brady, you just won the Super Bowl, Where are you going to go next?" Avalon Ohio? Where the hell is that? "bout half way between Youngstown and Toledo"--vacation spot of the stars and well-to-do.