Electric cars use energy also, most of which comes from burning fossil fuels. The rest comes from nuclear, hydroelectric, and a very small amount from wind and solar.
Now that Swift is putting the bankruptcy behind it, it is one of the best positioned shale companies in the world. I don't intend selling the new common or any warrants for a long, long time.
They're producing about 2.5 million barrels per day, but exporting only about 1.5. Their problem is that a drought has cut back electricity production, and the dam may actually have to be shut down completely. In that case, the oil pumps and exports would stop.
My Fidelity account is showing three cusip numbers. The first is, I believe, the new stock. The other two are the options. Strangely, I had 102,000 of SFYWQ, and I'm now showing 909 shares of the new stock, and 4874 for each of the warrants (9748 total warrants).
My account at Fidelity is showing what looks like the new cusip number for the stock, but there are no other changes. I have some ORIG also, but don't know why it's up so much today.
I'm neither long or short, but looking for an opportunity to get in. A key indicator of the equity value of a company in bankruptcy is whether the judge approves formation of a stockholder's committee. Committee expenses are charged to the company, so a judge will always deny such a committee if he or she believes that the higher priority stakeholders are unlikely to make a complete recovery of their debt.
Watch for the establishment of a shareholders committee. If the judge allows one to be established, it is because the current stockholders are expected to receive something after the reorganization. If no shareholders committee, current stockholders receive nothing. It's a very reliable indicator.
I have always contended that shorting a stock increases the number of shares outstanding. When a share of stock is shorted, the investor who loaned the stock for shorting continues to hold the stock, and the investor who purchased the shorted shares believes they own shares of the stock.
Since all the owners of the existing shares are going to receive new shares, those that have shorted the existing shares will have to purchase new stock to give to the owners of stock they have shorted. This is exactly the same as the fact that an investor who shorts a stock that declares a dividend must provide the dividend to the investor who purchased the shorted shares.
I wonder how many shorts will cover before the conversion to avoid the administrative burden? I also wonder how many shorts do not realize that they have to come up with new shares to give to those they sold their shorted shares to, so will think they are home free and will never have to cover?
If the financial structure of the company is in keeping with market expectations for the shale industry, the stock price will rise regardless of the warrants.
According to book values at the end of December, 2015, a bankruptcy would net unsecured creditors almost 50 cents on the dollar. However, if the company was forced to return cash to all secured lenders, there would be a forced asset sale that would probably destroy any recovery by the unsecured. The capital structure of SDOC thus makes a bankruptcy very messy and very risky for anyone who is unsecured and hoping for a recovery. The company is now a mess, but the mess could get worse in bankruptcy.
My expectation is that they want the new stock to begin trading at about $3. That will attract the stupid investors that think a low stock price indicates a bargain. That translates into about 1 new share for each 10 of the existing shares.
I would think that the existing shareholders will receive 4% of the company. Existing stock will be cancelled and new shares will be given to existing stockholders in proportion to their current holdings.