There is also the mining spill in Minas Gerias which is where CIG is located - I cant seem to find if they are associated too, I know its just Vale and BHP, but perhaps CIG is involved too.
Horrible news from the Brazil economy - may not be a quick turn around, but I will continue to add at these levels. If it drops below 1.50, I will add again.
I just think of Xcel energy falling to $5/share in 2008 and now its at 35. Recessions are when to buy stocks, you may not pick the bottom - but they will recover in time.
I think we get a close around 7.60 today with some consolidation tomorrow.
if they break 7.90 with some volume, there isnt much resistance back to around $10. I think this will be $9.00 in 2 weeks.
Keep on shorting. You can only make 7$/share on your side - this has $6/share in cash (I know they will use some in the coming Qs, but this is trading like its going out of business. That aint the case).
This will be around $9 by the time it reports agian.
Theyve been left for dead before - another recession and everyone will be heading back to school to get better jobs.
I have my stop loss set, so I am protected. We will see where it heads. Held up well after news.
Yeah, the debt is a problem, I think that was coupled with the weak Real against the dollar, a slumping brazil and the global climate summit in France. Not a good day for energy names.
Long term they see the purchase as paying off, but now it isnt as nice.
Sell off today in Brazil doesnt help CIG, the news was muted by todays sell off.
Long term - this is good news for CIG, but they will be taking on more debt (if I understand the terms), but when Brazil turns they will be poised for more growth when that happens.
Great prices down here.
Good thing i added to my position at 1.92. Still well in the red, but I am not worried about it getting back to higher levels. Average is now at $4 - which is easily attainable, and when Brazil recovers in 2 years, it will be much higher than that.
CMIG was up 3% in Brazil today. Tomorrow might be interesting. Should atleast be green
The 3 dollar price is assuming their price recovers. (pulled it out of thin air). Its unfortunate the obligations that they have going forward from all the deals Brad inked over the last few years. Some may work out and have a little ROI, but starting fresh at this point is hard, they have exhausted alot of options, however they can use alot of operational income to fund much of it.
I will be interested to see how the balance sheet looks a in 2-3Qs after all the restructuring, things wont be pretty, but their brand is phenomenal and I thnk thats what have people holding on. They were 'profitable' once - but had to restate those earnings to a loss. They made 0.05EPS once. Thats a positive sign.
I will give it a few Qs and see what they can muster up and go from there. Things could get ugly, but IF they can pull this off, and I think they can, perhaps supply contstraints arent as big of a fix as I think they will be.
I have a 18month price target of $6.50 on the stock. But im playing with house money, so i can wait even if it goes down to $1.50 (which i dont think it will get below $2).
My last purchase was at 2.65, so I will not buy unless there is a sustained dip down around $2. But, my shares are all also free, since I sold a majority up at 3.95. But I still have faith in the company. So I may buy some more down at lower prices.
I would like to see where things go from here, but there may be some silence until there is a firm grasp about what is going on. I have a feeling that you are in a little different positon as I am, so I dont think my opinion has any merit. That dip down to 2.05 was a fluke. I can nearly garauntee you that this will not go below $2.
Heck, I have thought about this scenaria, issue another 3million shares in a secondary at $3 (they can easily price them there), raise 9million$ and now Drexler can be smarter with the money. Take that 15mil, get the price back to $8/share in a couple years and life will be grand. Cash flow and inventory has been the issue, raise some more $$, take the HUGE hit now and use it to re-build.
I dont know what the best course of action is.... they just need $, so either take on debt or make a secondary.... I think thats what the market fears.
Drexler has lost over 2mil$ on his investment in MSLP, so he has skin in the game.
Indeed - pretty decent Q. They just need to focus on debt payments, because that is a huge burden right now, and the credit ratings dont like to see all that on the balance sheet. Their earnings are good, they will probably keep the divy at 25% and pay down some debt since quite a bit is due next year.
We will still get a decent chunk this year I expect. I will average down 1 more time, and then ride out the storm until Brazil turns the corner. Itll happen, and stocks like CIG will get back to pre-recession levels.