Peabody Energy Corporation (BTU)

[LouisDesyjr]

Equity is almost zero now

I took a look to see why the stock was dropping over the last few weeks. I was not expecting a big drop until they filed all of their schedules, which has had its timeline extended until mid June 2016.

The two recent released items that show equity almost at zero are:

1: 10Q report for period ending March 31, 2016.
http://ih.advfn.com/p.php?pid=nmona&article=71391349
This report shows equity as $811 million and the company lost $109 million in the quarter.

2: DIP financing was approved in May 2016 for $800 million.
http://ih.advfn.com/p.php?pid=nmona&article=71509207

Taken together, these two filings show that the equity is all wiped out by going through these steps.


Start with the equity listed in the 10Q report of $811 million. Then subtract the DIP financing $800 million, that has super priority over all classes in the BK, that leaves equity of $11 million for the common shares. After that the company is losing at least $30 million per month, so for two months of BK that is another $60 million in equity gone, that leaves equity negative by at least $49 million. Equity is also getting worse by $30 million per month, but at this point it does not matter since it is all wiped out anyways.


Louis J. Desy Jr.

Disclosure: I own BTUUQ June 2016 $0.50 put options.