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Oil prices still going no where
It looked like for a brief few days that maybe Iran, Russia and Saudi Arabia would stop their flooding the market with too much oil. But that all failed after some recent OPEC meeting.
Now it looks like until everyone goes bust in the oil space, that they will all keep production as high as possible to ruin everyone else.
Louis J. Desy Jr.
Shares cancelled 8:59am today
http://otce.finra.org/DLDeletions
Its over.
The shares were cancelled and delisted at 8:59am today.
Louis J. Desy Jr.
Old shares will NOT transfer
The old shares will not transfer to the new ticker.
The new shares are being issued to holders of debt/bonds and other liabilities, and those are the shares that will trade on the new ticker.
Louis J. Desy Jr.
Problem with the constant assurances
There are a number of things that are different this time as when compared to 2008/2009.
1: The fact that numerous people keep issuing statements that everything is fine with DB, means that everything is not fine in the minds of the general public. One of the most important things a bank has is that people believe their money is safe in said bank. The minute anyone has any doubt or fear about being able to get access to their money, they take their money out of the bank. If enough people do that to any bank, it is dead.
2: DB is a complete mess. They seem to have found a way to lose money at everything they do, and do most things in an illegal manner on top of that. At last count there are over 7,800 lawsuits still pending against the bank on top of the DOJ fine, on top of the LIBOR scandal and who knows what else they have been messing up on.
3: No one seems to know how bad the problem is or how far in the red they are. Either DB is so messed up that they have no idea how much money they have lost, or they do know and don't want to tell anyone since then everyone would know that they are insolvent.
4: DB looks like it is about to have the largest bank run in the history of the planet. Why would anyone believe that are going to be fine, as they have lost money year after year and got hit with fine after fine, or that they actually would be able to 'fix' the bank?
5: DB is in a mess and losing money even though they have tens of trillions of dollars in derivatives on their books. They are now trying to reduce their exposure to 'only' 40 or 50 trillion worth of exposure, meaning they will probably have lower trading profits, in addition to taking loses on some of the closed out positions. It is not like they can hope to increase trading revenue by trying to get up to 100 trillion in open positions.
6: Back in 2008/2009 there was still all kinds of other places to draw capital from and central banks or governments able to backstop DB. Today, all those places are 'tapped out'. Back then we had bankrupt governments bailing out bankrupt banks. The federal reserve went from under $1T in loans on its books to almost $4T today; plus Fannie Mae and Freddie Mac each ran out into the markets and bought up 3 or 4 trillion in loans combined, plus all of the other central banks vacuumed up as much as they could of debt to get interest rates down. All of them bought so much of that stuff that some countries only have several months left of buying bonds or debt before they will start to run out of stuff in each asset class to buy to keep interest rates down.
The only hope I see is that the ECB or Germany 'back stop' DB and do a conservatorship type of takeover, like the US Government did with Fannie Mae and Freddie Mac; plus enact the same emergency measures now that were in effect in 2008 to 2010 (unlimited FDIC depositor insurance limits, unlimited insurance on money market funds); and then sell off DB in pieces over time.
And of course, everyone at DB needs to be fired for having constructed what may well be the largest mess of derivatives in the history of the planet as the largest 'financial weapon of mass destruction' ever.
Louis J. Desy Jr.
Disclosure: I own DB put options.
3 million shares traded
Unfortunately, anyone buying is doing one of two things:
1: A trader who expects there to be one last bounce, and is playing off of that.
2: The retail market that has no idea what is about to happen, and does not even bother to understand the process or the timelines.
While people in the first group are playing a dangerous 'game', they are experts and know the risk they are taking.
The people in the second group simply have no idea what is going on. They seem to keep talking about how other companies have recovered or even think that bankruptcy wipes out the debt and the company is saved, not understanding that most of the time the common shares get wiped out also.
Louis J. Desy Jr.
It is over Wed, Oct 5, 2016
8K report filed Fri, Sept 30, 2016:
http://ih.advfn.com/p.php?pid=nmona&article=72564274
Bail in and depositors
The thing is, for this to work and get the most money possible, the bail in would need to take everyone by surprise, otherwise everyone would take their money out.
Of course, if people become convinced that a bail in was going to take place, and started to take their money out, DB might be forced into doing a bail in since it looks like there is no where else to cover their losses, even with converting the CoCos.
Louis J. Desy Jr.
CoCos going to convert?
Does anyone know what the trigger is for the CoCos to convert into common shares?
Louis J. Desy Jr.
No bid procedure
What you can do, if the stock goes 'no bid' (no one will buy shares at any price, even below $0.0001), is that you can ask the brokerage firm to take 'the stock off your hands'. In effect, you give it to the broker firm for nothing, but since you have now closed the position, you can claim the stock loss in that year.
Louis J. Desy Jr.
Delay in entry of 'Effective Date' for plan
It looks like the final few documents that are required to be filed had not been done yet, so the entry of the effective date will be delayed until that happens.
No idea why anyone would delay filing documents, since these look like they are related to the new debtors of the reformed company, and every day they delay adds expenses to the bankruptcy.
I would have normally considered that they would have spent the ten days hurrying up to prepare and filed the missing documents.
Louis J. Desy Jr.
Open call options example
I found some documents with OCC about what happens and a recent example with Penn Virginia Corporation:
http://www.theocc.com/webapps/infomemos?number=39678&date=201609&lastModifiedDate=09%2F13%2F2016+08%3A46%3A42
Open call options
This could be a problem, IF the existing common shares somehow survived long enough to force the call writers to have to do something about the losing position, providing the stock price stayed up.
The problem is that the shares are going to be cancelled any day now so the call option will become worthless since there are no shares to be delivered anymore (or any delivered shares will have a value of zero).
There is no reason for anyone with an open call position to bother closing the trade, they can just let the options expire worthless when the stock is cancelled. For tax purposes, the position will probably be deemed as completed or closed when the shares are cancelled and the tax on the profit due in that tax year that happens.
Louis J. Desy Jr.
Paying themselves? Probably yes
It does look like they are trying to divert company funds to themselves. One of the directors is an owner in the LLC that they are buying the interest in.
8K report of Sept 20, 2016:
http://ih.advfn.com/p.php?pid=nmona&article=72484915
Can't buy options when in bankruptcy unless to close
When a company is in bankruptcy, people are only allowed to buy options in order to close positions that they have open. So the only people that can buy the call options are people that wrote call contracts and still have them open.
Also, no one is allowed to write (open) new option contracts.
Louis J. Desy Jr.
Appeal of plan? Not likely
It would not make any sense. The unsecured creditors are taking a large loss, and they would need to be made whole before the existing common shares got anything.
The other problem, is what basis would they appeal on? The company is bankrupt.
Louis J. Desy Jr.
Closer look at the recent operating report
Monthly Operating Report for Peabody Energy Corp., et al. for the Period of August 2016, document 1323:
http://www.kccllc.net/peabody/document/1642529160920000000000013
On page 14 is a consolidated balance sheet. That does show stockholders equity of $577 million. Operating losses for the month were $14 million.
The problem is the 'Property, plant, equipment and mine development, net' of $9,087 million.
The property is carried at cost on the balance sheet, so a loss or write down of as little as 7% on the assets, will wipe out the equity.
As one can imagine, the write down on assets, that were unable to generate enough cash to keep the company out of bankruptcy, will probably be on the order of 10% or higher before the case is done, leaving the existing common shares 'under water' and worthless.
Louis J. Desy Jr.
Common does look dead - correction to last post
I took more of a look, since the operating report just filed is showing stockholders equity as being positive, but looking more it looks like there will be all kinds of write downs that will wipe this out.
some prior information that leads me to this conclusion:
1: Peabody Energy own busines plan for 2017 and forward. The import part is on page 45 that shows EBITDAR of $478 million.
https://mscusppegrs01.blob.core.windows.net/mmfiles/files/ch11/peabody-energy-business-plan.pdf
2: Prior article showing expected outcomes of reorg plan depending on EBITDAR with ranges of $420 million (pessimistic outcome) to $720 million per year (optimistic outcome).
The business plan as presented is more towards the 'pessimistic outcome'.
Under the 'pessimistic outcome', it is expected only the first and second lien notes get equity in the reorganized company, everyone else gets zero. (i.e. Unsecured creditors get zero, existing common shares are wiped out, unsecured notes get zero)
Louis J. Desy Jr.
There MAY be some hope for the common
I am reluctant to say it is definite, but the consolidated balance sheet in the operating report does shows equity as being positive at $571 million. I thought that it would show negative.
IF there are no large write downs on the assets, it is possible that maybe the existing common shares can survive the reorg.
If anyone is considering investing in BTUUQ, I would look at one of the bond classes before buying the common shares.
Louis J. Desy Jr.
It IS unbelievable
The company just told the world, in the latest 8K report, that the shares are definitely going to be cancelled, but the stock jumps on on the 'good news'.
It just goes to show that large parts of the retail market do NOT read any of the reports.
As a side note, anyone still holding ACIIQ should use this opportunity as a 'gift' to get something for the shares before they stop trading.
The only slim hope that the trading does not stop this weekend is that there is an appeal (not very likely) or a delay with some of the documents discussed in the 8K report being filed. (The effective date will not be until and after the documents are filed.)
In any case, at some point soon, the stock will stock trading and the shares cancelled.
Louis J. Desy Jr.
What may be going on
I think people are confused as to what the plan being confirmed means. I have seen this happen before where there is a press release, and the retail market thinks that 'now the company is saved', when the truth is that the stock is still on track for being cancelled.
Some people, usually retail investors, think that once a reorg plan is completed, believe the company now is the same (existing common shares remain) but now free of all of the liabilities. They miss the part where they are told in the 8K reports that the common shares are being canceled.
Louis J. Desy Jr.
Buy back shares?
Why would the company buy back the decorative common shares?
The whole idea is to get the 'boiler room operation' going full speed and pile the muppets into the decorative common shares. The higher the stock goes, the easier it is to get the muppets to pile in!
I think something must be wrong with Vik and his crew.
It is like no one is even trying to paint the tape anymore on this stock, and it is so easy to paint the tape on this one.
See, I just put in an order for 30666 shares and got a little volume going at $0.0003, and I think I was the first trade of the day, even though it is almost 1pm!
Now, when 3:39:45 pm come around today, I will put in order to sell 40,000 at $0.0002 and put the price down 33% for the day!
Easy as pie!
Louis J. Desy Jr.
Reason or possibility #4
Reason/Possibility #4: The Good Gaming 'product' ends up being just as 'valuable' as the SirenGPS product after several months, and insiders dump several billion common shares onto the retail market. After which the stock stops trading with hundreds of millions of shares on the ask at $0.0001 and nothing on the bid.
Which at that point there is an 8K filed detailing how the then current controlling shareholders decided 'out of the goodness of their hearts' to take back their worthless product and give back the super preferred shares, there by setting the stage for another replay in 2017/2018 with a new set of muppets.
Louis J. Desy Jr.
Trading below $0.001 (three zeros in front)
Most trading platforms should allow you to place orders all the way down to $0.0001, which is the minimum price for the automated NASDAQ systems.
If for some reason you can't trade and enter the price online with three zeros in front (like $0.0002 or $0.0003) then you would need to call the broker and place the order by phone.
Note this is the same process (call in a phone order) that anyone would have to do if they want to place a trade with the price below $0.0001. I have seen a price end of day show a few times as less than $0.0001 and, at first, thought it must be a mistake. Then I found out that orders called into a trading desk can go off at less than $0.0001.
One way any company can 'fix' things if the stock stops trading because the price is too low would be to do a reverse split. I think the recent talk about a reverse split coming is because those people think the price is going to below $0.0001 and think a reverse split will be the only way to keep the stock trading.
Louis J. Desy Jr.
Shares are going to be wiped out/going to zero
Unless someone files an appeal on the order confirming the plan, the shares will be wiped out and stop trading before Monday, September 26, 2016.
The shares are going to zero.
Once the court enters an order for the effective date for the plan, and the shares stop trading, the brokerage firms will remove the shares from everyone's account because they will be cancelled.
Louis J. Desy Jr.
Material announcement - Plan confirmed by court
Arch Coal restructuring plan wins bankruptcy court approval
The court approved the plan on September 13, 2016. This starts a ten or eight day time period for anyone to file an appeal of the confirmation of the plan. Once that deadline passes, around Friday, Sept 23, 2016; the court will enter an order for the effective date of the plan. At that point it is all over for the existing common shares.
At that instant the stock will be wiped out and trading will be halted, never to restart again. This trading halt could even come in the middle of a trading day, as it has with a few other companies in similar situations.
Unless someone files an appeal of the entry of the plan, the existing common shares will never open for trading on Monday, September 26, 2016.
Louis J. Desy Jr.
Appeal Certificate of Correction?
Why would SG or WDDD want to do that? The timeline for the case is already months, if not now on the verge of becoming years behind schedule.
The case was filed in March 2012 and on the 'fast track' schedule within the court, meaning it was expected to finish in about one year.
Here we are over four years later, and, except for some initial motions and a motion for summary judgement hearing and ruling, WDDD is still waiting for a trial date and on hold until the PTAB ruling, which is not due until November 30, 2016.
That means that IF the trial somehow gets back on track that maybe before the end of 2017, and probably not until sometime in 2018 will the trial finish.
Assuming WDDD wins, ATVI will then probably appeal, meaning another year or two will go by, putting this into 2020, and that is if things 'go well', of which nothing has for WDDD.
Louis J. Desy Jr.
Certificate of correction
The fact that SG did not file for a certificate of correction, until the issue was brought up in a motion to invalidate the patents, shows that even the experts can get taken by surprise.
A lot that has happened here has most certainly not been a standard patent case.
Louis J. Desy Jr.
Raising funds without issuing shares?
Except for a share of any potential recovery on the lawsuit, the company effectively only can raise money by issuing more common shares. Even the loans or warrants that the company issued were all convertible into common shares.
Louis J. Desy Jr.
Understanding the legal process
How can one understand things that no one, even the experts, foresaw?
A few examples, the delay in the trial, the certificate of correction and the PTAB.
1: Even SG did not think that a certificate of correction was needed, and multiple people looking at the issue did not expect that there was a need for one or that it would change the case. If SG had thought the certificate was needed, they would have filed for one as soon as they took the case, instead of having the long delay when it was made an issue in a motion trying to invalidate the patents.
2: The delay in the trial. The original trial was delayed months because the judge had to take the Whitey Bulger criminal trial first, and that pushed off the WDDD vs ATVI for months.
Those were things that no one could have foreseen or predicted, but the delay meant additional time and money was needed for the case.
If anything, the entire course of the case has been one misfortune or delay after another. Nothing has gone according to plan or schedule for this case. It is not like something in the course of this case would allow the whole schedule to speed up or jump ahead, instead, any new, unforeseen, additional events will just put the timetable more behind scheduled.
Even the PTAB, at best, just leaves WDDD in the same place as prior to when that review started. The 'best' outcome of the PTAB is that WDDD gets to keep all of its claims intact, at best a neutral outcome, that is as best as it gets. Any action by the PTAB could reduce or invalidate a number of the claims and leave WDDD worse off than when the whole PTAB process started.
Louis J. Desy Jr.
Forward expenses
I think that the course of the case shows that there will be additional expenses that no one can foresee.
When the case first started, no one, including SG, even thought that a certificate of correction was needed or that there would be a PTAB challenge.
There was even the trial delay that pushed the trial off a number of months because the judge had a higher priority case that had to be done before WDDD patent case.
Any long time observer of WDDD would be very surprised if all of a sudden WDDD had no more problems and could get by with almost no money until the end of the case.
Louis J. Desy Jr.
Contingency and share count
While one may believe that just because the case was taken on contingency there are no expenses or need to issue of additional common shares, the simple fact is that an additional 100 million or so in common shares have been issued, in spite of the fact that the case is on contingency.
We just had an 8K report detailing another 35 million shares plus warrants for another 35 million common shares, all while the case is and was on contingency.
For a company that is supposed to have 'no expenses', they seem to need to issue millions of more common shares every year and have doubled their share count since the case started.
The trend, through out the case while being on contingency, is about 25 million additional common shares continue to be issued every year.
Louis J. Desy Jr.
What is your view?
It is interesting in that you post that you think my numbers are all wrong, but then never seem to state what you think the outcome will be.
I take it that you do not view the stock as a buy and hold to the end of the case, but instead are trading this on investors sentiment and trading on swings in the stock price?
Louis J. Desy Jr.
Your damages estimate?
What is your damages estimate?
I think that the old model may have some predictive value if we see if the assumptions back then still look like they are on track for today or not.
As one example, there was an older poster that kept predicting the shares would fall to $0.05 or lower eventually. At the time, a number of people did not think that would happen, including me, especially since the stock was trading in the $0.15 to $0.25 at the time, and even sometimes got up into $0.30s. At the time it did not seem rational that people would allow the stock to fall so low, unless the company completely lost the case.
While that poster did not seem to understand themselves why they thought the stock would go to $0.05 or lower, it turned out they were correct over time and showed that they understood how the share were going to trade over an extended period of time.
Louis J. Desy Jr.
Older damages estimates
I found an older posting at:
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=87277552
from Friday, 04/26/13;
which seemed to be as good as anyone could do or come up with at the time.
It looks like it was something before I had started to take part in the conversations on IHub, prior to the summary judgement ruling, and prior to the VRNG vs GOOG decision.
Back then people seemed to think the going forward from filing date to end of 2018 royalties would be at least $142 million.
The case is on contingency, so WDDD gets about 60% of that for $85 million.
Common shares are at 210 million, and I expect the trial plus appeals to be a decade from the filing in 2012 and expect that the company will need to issue 25 million shares per year, on average to get to the end of the whole thing for another 175 million common shares in total, bringing total common shares count to 385 million common shares.
There is a retained earnings deficit of around $41 million, that may reduce any taxes, or allow WDDD to payout case without it being taxable to shareholders as a 'return of capital' instead of a dividend from profits and taxable, so hopefully only $45 million of the $85 million would be taxed, and leaving the company with $70 million in cash to pay out.
That means that per share cash will be $70 million / 385 million common shares or $0.18/share or somewhere around there if things go this way.
The problem is that any number of things could happen that could 'kill the case' along the way, but if somehow WDDD can get through a trial and appeal process, as long as any one of the patent claims survive all challenges, then ATVI would be liable for damages.
This is why one of the tactics that ATVI is using (and other do, like GOOG in the VRNG case) is that they will keep trying different paths and tactics to 'chip away' at the infringing claims. Every time another claims on the patent gets invalidated or held to not apply, is one less things that can be used against them at trial.
Louis J. Desy Jr.
It looks like there is something wrong
The 10K reports filed as of yesterday cover to the end of 2014.
I am seeing about 150K shares traded and the stock down 30% to $0.10, giving the company a market cap of around $5.6 million.
It looks like people expect the company lost money through 2015 and 2016, making the company 'fully valued' at around $5 million or $6 million in market cap, about what it has on had for cash.
I think the problem is that some retail bid it way up and are not disappointed at the filed results on the 10K for 2014.
Louis J. Desy Jr.
Where proceedings being held
It is the Federal District court, right on the ocean.
I was there a few times, I think just after it opened in the mid 2000s. I seem to remember thinking that the real estate for the building must have cost a fortune (or worth a fortune), since it is right on the water.
The only problem back then, and I expect still for today, is if you are not there before they open court for the day, the on site parking will probably be all filled up and you will end up parking elsewhere and need to walk a bit.
I remember the last time I was there, I was there to check on a tax lien for a friend. I only needed a few minutes onsite, so I was able to park in a spot that was not 'too illegal'. Since I expected to only be there for a few minutes, plus there were cars all over the place and as long as you were not blocking an isle, they would let it go.
Since they built the turnpike extension all the way out to the airport, it is much easier to get to the courthouse from outside of the city.
Compared to the other courthouses in the area, it was/is very new and modern.
The only thing that I do not like about the area is that I do not think there is any place really close to get food (like short walking distance or reasonably priced), that I remember. For whatever reason, it is as though stuff like that was an after thought.
Louis J. Desy Jr.
Case filings
Normally, people need a pacer account to see the filings, but parts of the docket are also available at:
http://www.plainsite.org/dockets/lv8pvzj9/massachusetts-district-court/worlds-inc-v-activision-blizzard-inc-et-al/
There may be a delay as it takes time from when the documents is posted for it to get indexed.
Louis J. Desy Jr.
Older missing messages
I forgot to report, the reason all of the older messages are now gone is because the stock was delisted. Apparently, once that happens the message board gets deleted after a period of time.
Louis J. Desy Jr.
Missing message - Mod Squad
There appears to be a kind of super moderator for ihub, called Mod Squad. I can see the deleted message as board moderator but I can't restore it. Apparently, board moderators can't override Mod Squad decisions on deletions.
As another note, I lost a lot of postings here that had extensive calculations that I could have used on future postings with other stocks, that now appears to be totally gone.
Louis J. Desy Jr.
Follow up on missing messages
I don't even see how ANY message could be being deleted. At the moment I am listed as the only moderator and do not even know yet how to delete messages on a board I am a moderator of.
I think the system may be having an index or database problems.
Louis J. Desy Jr.