absolutly insane theres that big of a disconnect bwteen the common stock and preferred stock with the 5-1 conversion in a couple of weeks and also you get paid the dividend on the preferred stock while you wait for the conversion. Short the common here and buy Preferred C and D lock in more then a 80-9- percent gain with the dividend payment of the Preferred shares
C and D series thats a 70 percent gain from where they are trading now
Sorry also left out the 50 mill they put aside for another senior secured exchange further reducing debt to 350 mill before years end and also they have 26,000 acres in Haynesville 17000 eagle ford and 300,000 in TMS. With eagle ford sale they could fetch 150-175 mill for that land at today prices further reducing debt to 200 million and under. No preferred divy obligations as they will be pain in common stock. Kudos to management no way no how will they need to file bankruptcy. Preferred C and D are a steal at 1.50 period
All will be converted to common besides the sahres that werent tendered around 4 mill shares total will be outstanding. They could sell there eagle ford acrage for 150 mill for net debt of 250 mill and still sitting on 300k acres of TMS land. Easy buyout target if all this is done.
panick creates oppurtinity
Dont think the common will trade much lower then .55 they just knocked off a ton of debt and intresent payments on Preferred shares since they are paying in common stock for the time being. Yes some dilution but also huge cost savings. Will tender more senior debt too in next couple months so total debt will be down to under 300 million. IF the company sold some tms acrage about 100k out of 300k they could knock down debt by another 150mill. This is what they have planned as soon as more senior debt is tendered and after pfd debt is exchanged. Total debt should be less then 150 mill in next 6 months with 100k tms sale. Still will have incredible acrage in TMS and eagle ford
No brainer buy on Preffered series c and d