Not a bad idea to see what bondholders think, but they're speculating on the same info that we stockholders have. They've doubled the value of their bonds without any fundamental changes in the company outlook since Mary Berner took over in October. I think that there's been a realization that the selloff in equity and debt was way overdone, considering that the company can pay debt til it matures in several years, and that there is a good chance at a turnaround, esp. with Mary Berner at the helm. It sucks that this coincides with the overall stock market tanking; otherwise, I think that CMLS would be in the $.40s-.50s now.
"They have so much cash on hand that if they default on 2-15, there will be a lawsuit."
There is no default if interest isn't paid on 2/15. You don't know what a grace period is?
Your statement implies that the 30 day grace period doesn't apply to the bond buyback restriction, that non-payment by 2/15 is essentially a default for that purpose. I doubt that.
I think it's obvious that they won't pay on 2/15 to use in restructuring negotiation with bondholders. The real question is whether they pay by 3/15.
Compare the cash holdings of both companies at the time of the interest payment due date when you say Sandridge will do the same as Swift did.
So you expect Sandridge to pay $60 million in the Feb & Mar interest payments, and whatever other interest payments are due in the next 6-9 months?
Thanks. Important to know that another $40 million is due so soon. When's the next after that? I'm trying to gauge the time pressure here.
Again, negotiating debt restructure takes time, and it appears that they hired advisors in January. Maybe they can do it in 2 months, maybe not. What fraction of $855 is $22? Is it really too much to pay for more time, time to negotiate, time for oil, perhaps, to rebound off bottom? What's the difference of filing bankruptcy with $830 million versus $850 million cash (minus cash burn)?
When exactly did the Board decide to file Chapter 11? I'd really like to know. Was it in June, when the company issued over a $billion in senior secured notes? In July, when it paid preferred stock dividend, or in September, when it suspended it? Was it in August, when it bought back $250 million in senior unsecured notes, then issued convertible senior unsecured notes? Was it in Oct, when it bought Pinion? Or when it did $400 more senior unsecured bond swaps in Oct? Was it in Nov, when it bought the Niobrara assets? Was it this month, when it was delisted? They knew that was coming, and didn't do a reverse split to stay listed. Was it when it settled with Occidental, just days ago? Or was it when it took the ~$500 remaining credit left, also days ago. I'd really like to know what triggered the decison.
I doubt it, and I've not seen such a case. If it we're even possible, a class action stockholder lawsuit would be a given, and the suit would have more weight than if stockholders were legitimately wiped out in bankruptcy. If they're going to eliminate old equity, why avoid bankruptcy? Even in bankruptcy, it seems that management gets what they want--new equity, continued employment, stock options...
If they restructure debt out of bankruptcy, then current stockholders will likely own a small fraction of the company, probably less than 5%.
Pretty significant...I see why some think they won't pay it even with their ample cash. But I don't think non-payment is a given considering the situation. They recently hired their strategic advisor, so I think they do what they need to do to get enough time to negotiate an agreement with creditors. I don't understand why they're not buying back the 1 cent bonds. They must not be, because if they were, the bonds wouldn't be 1 cent.
Without even looking into it, I will hazard a guess that the Board/management took pity on its stockholders, and insisted on it in their pre-pack settlement with creditors. That is very unusual. Maybe the Board/management are large stockholders, so maybe it's in their own interest.
You test credulity when you state in one post that there's "no chance of current equity getting anything," then in another post, you state that stockholders "could" get something, in line with what you posted yesterday or the day before about stockholders *likely* getting a stake in a pre-pack bankruptcy. Read your own writing and tell me if you'd heed it if it came from another person.
Often? No, it's rare that legacy stockholders are given anything in bankruptcy--pre-pack or otherwise--and if they do get something, it's almost always because the value of the assets is greater than the liabilities.