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Anyone following this one?
The yield looks interesting but may have currency risk with exposure to CAD.
Louis J. Desy Jr.
Equity Committee does not seem possible
The problem is that the company is so far 'in the hole', that I do not see what an Equity committee could get or what they could reasonably expect to accomplish. While it is tragic that the common and preferred shares are wiped out, the problems is that there are all kinds of unsecured debt and unsecured liabilities that may be wiped out also which is higher in priority.
Any vendor that had a payable open with them when they filed bankruptcy is now an unsecured liability, just ahead of the common and preferred shares in the order of priority, and there is no way to make them whole.
I would expect the best an equity committee could do would be to get warrants that would probably never rise in value to the point where they could be exercised, since the loss are so large.
I did read some of the letter from shareholders on PrimeClerk, and wished they had sold in 2015 or even 2014 when oil prices started to decline.
Louis J. Desy Jr.
When the 'Q' gets dropped? When they are canceled
Technically, the 'Q' will get dropped when the court announces the effective date of the plan and the existing common shares are cancaled. The problem is that at that point the existing common shares will be canceled and be worthless.
The new common shares, in the reformed company, may start trading after that under a variation on the old stock symbol, but the existing common shares will not be part of that.
Louis J. Desy Jr.
Equity Committee? I don't see it on the docket
I looked at all of the documents, and I see nothing about the establishment of an equity committee yet.
https://cases.primeclerk.com/magnumhunter/Home-DocketInfo
I do expect there will be one established at some point, but I do not think they will be able to do anything.
Louis J. Desy Jr.
No idea with this stock. Comments? It dead. Assets are gone
This company is dead for the following reasons:
1: The 'current' corporate charter expired years ago and would costs tens of thousands of dollars to bring up to date. That charter was filed after the original charter was taken over by someone else, leading to a question as to how these shares can be with the proper company. Barnett put out a press release saying that the new corporate charter 'fixed' that problem but I do not believe you can fix a problem like that in that manner.
2: The original corporate charter was allowed to expire by Barnett and got renewed by a person that had stripped assets from the company years prior to that.
3: Barnett controlled a majority of the shares and stopped filing reports years ago.
4: The old company had an award for lawyer fees against it but it looks like that estate (the lawyer passed away) was never able to collect anything.
5: The CEO is in jail, and even if he gets out, all indications are that he is broke and lost whatever money he had. The rumors are that it was all lost in deals with the real estate bubble.
6: It is expected that at any point the SEC will delist the shares for lack of filings, no corporate charter, and no indications of anyone (Barnett) willing to provide information or answer questions about anything about the company.
7: Even the last report, for period ending 09-30-2010, shows the company is broke. www.otcmarkets.com/otciq/ajax/showFinancialReportById.pdf?id=37167
Cash was $270.78,
Oil Investments were carried at $75,000 but no one knows what that was.
The only other asset was capitalized legal fees of $343K, which is the amount of money spent on legal fees and in theory has value as an asset since they should collect at least that much in money from the court case against prior insiders that stripped assets from the company except there was never any indication they collected anything.
Liabilities were $841K, giving equity of NEGATIVE $422K.
It also showed revenue of ZERO.
So the company was $422K 'in the hole', has no assets that appear to have any value and was producing no revenue.
Even if the company was somehow 'still alive', there is nothing for shareholders.
It is expected that at some point the shares will be delisted and stop trading.
Louis J. Desy Jr.
Stock intact? Definitely not, it will be canceled
There is no way the stock is going emerge from the bankruptcy in tact and most definitely will be canceled.
As of 09-30-2015, equity is negative by over $600 million, and with another quarter of losses, it is probably over $800 million negative and maybe as much as one billion negative.
In the order of priority for the classes of debt and equity in the bankruptcy, the common shares are last and only are entitled anything after all of the long term debt is made whole and unsecured liabilities are made whole. There is no way to make them whole so the common is in line for zero and is going to be wiped out
Things are so bad here that a large part of the unsecured liabilities may be gone, they may even get zero, and a number of classes of the long term debt are going to take a hit. That is why it took months of negotiations with the long term debt that went nowhere, no one wanted to take the losses on the long term debt.
Louis J. Desy Jr.
AMZGQ emerging from bankruptcy and common shares dead
I can't tell exactly when the confirmation date will be entered, but you do realize that once that happens, and the 10 days for appeal passes, that the court will enter the 'effective date' for the plan, and the common shares will stop trading?
Louis J. Desy Jr.
ACI Plan
It looks like the plan was agree to by a large majority of the long term debt holders. The unsecured vendors and common shares are lower in priority and really would have no say since there is nothing left to cover them.
At this point stockholders equity is probably over $1 billion negative.
Louis J. Desy Jr.
Stock symbol change
When the change happens, probably tonight, the new symbol will probably be ACICQ.
The first three characters are from the existing symbol.
The fourth character is usually a C in other symbol changes that I have seen.
The fifth character will be a 'Q' since it is in bankruptcy.
Louis J. Desy Jr.
Common shares are dead
10Q for 09-30-2015:
http://ih.advfn.com/p.php?pid=nmona&article=69225417
In the months since that report, they probably lost at least a few hundred million more. In the last 10Q report, stockholders equity was negative $605 million so there is no way to save the existing common shares.
Depending on which long term debt issue one is talking about, the lower priority class will probably suffer large losses and I expect that all of the class took a 'hit' in order for the plan to be agreed to without any fighting in bankruptcy court.
I am surprised they filed 01-11-2016 since I had expected they would wait until the 15th of January.
Louis J. Desy Jr.
Hope for a miracle? That is not the situation with MHRCQ.
The company is hopelessly insolvent. The proposed plan is going to leave nothing for the common shares and the unsecured creditors, which are higher in priority, are also taking a large loss. In order for the common shares to have any recovery in the Chapter 11 plan, the unsecured creditors would have to be made whole first, and there is no way to do that.
The situation here is worse than a lottery ticket. At least with a lottery ticket there is a chance, even though it is very small, that you could get some money.
Here, the plan has already been proposed and the equity is so far negative that there is no way to for anything to be available for the common shares.
Louis J. Desy Jr.
How much convertible debt does SD have?
10Q for 09-30-2015:
http://ih.advfn.com/p.php?pid=nmona&article=69189333
There are preferred shares, but those do not convert. The dividends can be paid in cash or shares of common stock.
Convertible debt as of 09-30-2015:
8.125% Convertible Senior Notes due 2022, including holder conversion feature liabilities of $3,113, net of $105,691 discount , $36,406 million
7.5% Convertible Senior Notes due 2023, including holder conversion feature liabilities $2,361, net of $87,412 discount, $29,020 million
The conversion rate is approximately 363.6 shares of common stock per $1,000 principal amount of the Convertible Senior Unsecured Notes
Too far in the red
10Q for 09/30/2015
http://ih.advfn.com/p.php?pid=nmona&article=69189333
The problem is that as of 09/30/2015, stockholders equity was negative $403 million, plus they are losing money every quarter.
While they do have a 'pile of cash', they borrowed to get that and are just burning through it over the months.
Even if oil prices went back up today, they would need to make at least half a billion to get stockholders equity to zero.
The common shares and preferred shares are dead. At some point they are going to need to file Chapter 11, either voluntary or involuntary when their debt holders force it on them.
I find it amazing that anyone would have loaned them more money with these financials.
Louis J. Desy Jr.
Now I have got to recalc since it might actually be worth buying.
I need to take a close look to see if the $84 million per year in cash flow is realistic, since if it is there might be value here.
One thing I did not take out of the number was depreciation. Even though it is not a cash expenditure, something should be deducted for depreciation.
Louis J. Desy Jr.
Chances for the stock? Not good
I think the real problem is that Sandridge is dead. While they have a lot of cash on hand, they have too much debt and are losing money every quarter. I expect at some point they will have to file for Chapter 11 and the common shares will be wiped out.
I also think the preferred shares will get wiped out also in a Chapter 11.
Louis J. Desy Jr.
It will start trading on the OTC
Even though the stock is suspended from the NYSE, it will start trading over on OTC, and may even have a symbol change when it starts on the new exchange.
I expect the change should take place overnight and it will open tomorrow on the OTC under a new symbol
When the change takes place, you should see the notice here first:
http://otce.finra.org/DailyList
Louis J. Desy Jr.
Common shares expected to be worth less than $0.07
Using very rough numbers, I believe that the old common stock is worth less than $0.07 and would not consider buying unless the shares were $0.03 or lower. (And even that is a risk since it is very uncertain what kind of numbers the company will generate going forward.)
Sources:
http://www.swiftenergy.com/menus/IR-Recent-Fundamentals.htm
Most recent financial statements for period ending 09-30-2015
http://www.swiftenergy.com/ABOUT-SWIFT/RESTRUCTURE/q-and-a-documents.pdf
Q & A about the Chapter 11 filing
Discussion:
The company has done a 'prepackaged' Chapter 11 filing where the senior note holders are converting their notes into 96% of the NewCo equity. That will leave the existing shareholders 4% of the equity in the reformed company.
The company lost $354 million in the most recent 10Q report. From that we can see what the company could earn on a quarterly basis by backing out the write downs of $321 million, interest expenses of $19 million and depreciation of $35 million. That would leave the company cash positive of $21 million, annualized that would be $84 million. If we apply a cap rate of 10% to that, that would give the company a valuation of $840 million. 4% of that is $3.36 million.
With the shares trading for $0.14 for a market cap of $6.24 million, the price would have to be at least 50% lower before it can make any sense to buy the shares, plus the shares need to be lower than that to have a 'margin of safety' with all of the problems that the company can be expected to have or actual valuation that the company may end up with. As a result, I would not buy the shares unless they were $0.03 or lower.
While there are warrants as part of the deal, those may never rise above their strike price and should not effect the calculation that much.
Louis J. Desy Jr.
U.S Attorney appearing? Taxes
That is usually because of taxes. The government has a longer deadline to file a claim for any taxes owed and is a standard filing that is not unusual since they are probably behind on their tax payments.
Louis J. Desy Jr.
HDSI undervalued?
No Assets
No Revenue
No 10Q filings
Expired business license
I think lottery tickets would be a better purchase than decorative common shares of HDSI.
Louis J. Desy Jr.
Rip tide all the way to .002?
If no one ever files anything else for HDSI, how would it trade up to $0.002?
Louis J. Desy Jr.
Great BUYn time? If you are an insider selling it is!
Yea, lets load up on a company that can't/won't keep its business license up to date and can't/won't file its 10Q reports.
Sounds like a great way to lose all of your money.
Louis J. Desy Jr.
Clean shell? No, this is far from it, it is a mess
This is not a clean shell. There are almost two billion decorative common shares plus millions of preferred shares outstanding.
In addition, the 10Q reports are months overdue and the business license expired.
This is a mess.
I doubt the company will ever file anything again. If they can't spend a few minutes and a few hundred dollars to file the annual report with the state of Nevada, what makes anyone think they can run a real business.
Louis J. Desy Jr.
The last 10Q is months old
No one has any idea what the company has been doing. It is also interesting how the company could repay debts with ZERO revenue, and NO ASSETS.
I am sure that the retail investors are 'glad' they paid thousands of dollars for decorative common shares that have ownership in nothing.
Louis J. Desy Jr.
Legacy debt was paid? No one can tell
No one can tell what the company has been doing since 03/31/2015 since they have not filed any 10Q/K reports. It looks like HDSI might never file another 10Q or 10K report ever again.
There is also a question as to how valid any legacy debt ever was since they never showed any assets being bought with the money from the debt. It looks like the legacy debt was just a mechanism for insiders to get decorative common shares to dump onto the muppets.
Louis J. Desy Jr.
Yea, they just can't keep their business license up to date
Yea, they are going to do all kinds of great things, when they can't even spend a few hundred dollars and 15 minutes to file their annual report with the state of Nevada.
Did it ever occur to you that maybe the real plan was to just sell off the remaining decorative common shares that insiders hold and never bothering to file or do anything again?
i.e. They just wanted an opportunity to sell off the few hundred million in common shares that they still hold into the retail market.
Louis J. Desy Jr.
Not really relevant?
They can't file the annual report, which would only take a few hundred dollars and less than 15 minutes of time, for their business license on time, but one is to expect they can execute some kind of massive business plan?
Also, no matter what they file with the SEC, Paul is still the only officer and director of the company. No one else has any right to do anything. Any SEC report signed by anyone else than Paul is not valid until the state filings are made.
Louis J. Desy Jr.
Business license still in default
They have not filed the required reports with the state of Nevada. As of 11/30/2015, their business license is in default and Paul was still the only officer of the company.
Louis J. Desy Jr.
Bonds trading at only 26
http://quicktake.morningstar.com/stocknet/bonds.aspx?symbol=mhr
It looks like the bond holders are expecting large losses. If that is true then it would be another indication that the common shares and preferred shares will all be wiped out.
Louis J. Desy Jr.
Common and preferred shares look dead
While there is some hope that assets exceed liabilities ($1.4 billion verse $1.1 billion, resulting in equity of $239 million) according to the 09/30/2015 10Q report, there are signs that these numbers will not hold up, with the result that the common and preferred shares will be wiped out in the reorganization.
10Q for period ending 09/30/2015:
http://ih.advfn.com/p.php?pid=nmona&article=69234735
1: DIP financing is in the order of $200 million. This says to me that the assets are not worth what they are being carried for on the books, and any asset sales can only be done with a large write down from their carry cost.
2: I expect the company lost another $100+ million in the quarter that the bankruptcy was filed, reducing equity to under $139 million or less.
3: I expect with the assets not even generating an operating profit (i.e. even without impairments or depreciation, the land still can not generate enough revenue to cover the costs of pumping the oil.) the assets will take a 20% or more loss. That loss on the $1 billion in land rights and properties will wipe out the remaining equity, and probably take the preferred series shares with it also.
4: The DIP loan for $200 million already stated that they will take equity in the reformed company, NewCo. This will be higher in priority than the 9.75% senior unsecured debt that matures May 2020 of $597 million. I am expecting that this unsecured debt will take a loss on the reorganization, since the $200 in DIP will 'crowd out' all other liabilities.
Louis J. Desy Jr.
Plenty of demand? No, there isn't
There may be 'plenty of demand', but what good is it if it never buys or sells any shares.
I would question there being a 'lot of demand' when the stock can't even trade $1,000 worth of shares before noon.
Louis J. Desy Jr.
Savvy are hoping to accumulate more? Not very fast
Well, they are not accumulating at much of a rate. So far only a little over one million shares traded and the price is at $0.0002; a whole $200 worth of stock has traded so far.
At that rate it would take over a month for someone to accumulate a reasonable block of the decorative common shares.
Louis J. Desy Jr.
P.S. Anyone can forget about selling, since with volume and demand so weak, the price would crash if someone tried to sell 10 million shares.
Bids not being filled
Because the price is so low that people decided to hold on and pray for a miracle, since at $0.0002, it can only go to $0.0001 (as long as it doesn't stop trading like it did months ago.)
How come the ask is not being filled? Because no one wants to buy decorative common shares in a dead company that is going to have all kinds of dilution coming when the insiders cash out from the Good Gaming plan.
Louis J. Desy Jr.
Easy to tell when the lull will end
It is going to be very easy to tell when the holiday lull will end. HDSI will increase the authorized shares for the decorative common shares by billions.
The reason is that in order for insiders to be able to cash out, they need the additional shares available to issue, in order to be able to issue the shares to insiders, who will then dump them into the market onto the muppets.
They should have increased the authorized shares before taking in Good Gaming, then no one would be able to tell when the conversions were taking place.
Anyone holding decorative common shares hoping to unload them at the next spike in price is going to have a problem since the insiders will be unloading hundreds of millions of the decorative common shares at the same time.
Louis J. Desy Jr.
Run??? It cannot even walk ;)
I think it is more about to 'trip and fall'.
Fortunately, at $0.0002, it can only fall $0.0001 to $0.0001.
Louis J. Desy Jr.
None of my business?
Then why do you post about such things in an open forum?
It would imply that they can be a topic of discussion.
Louis J. Desy Jr.
HDSI is poised to RUN? How?
Run? How?
I am showing the bid/ask at $0.0002/$0.0003 with ZERO shares traded at 11:30am.
If this stock starts to 'run', it will probably trip and fall down to $0.0001.
Louis J. Desy Jr.
Shell has no debt, BUT does have 2 billion shares issued
Yes, there is just the problem of the muppets with a few billion common shares.
If it was a real product, that could raise real money, they would have been better off forming their own company from scratch.
CMGO merged GG over here because there own ability to issue decorative common shares appears to have broken down.
Louis J. Desy Jr.
Pay off the debt? Was it really 'paid off'?
I would put it to you that any debt was never real. How could HDSI 'pay off' any amount of money when revenue was ZERO? What would a real debt be paid off with?
All debt so far has just been a mechanism for insiders to cash out by converting 'debt' into decorative common shares that are dumped by the hundreds of millions onto muppets in the retail market.
Why would anyone lend any money to a company that only had assets of $515 and ZERO revenue. What would the loan be secured by or based on?
If these loans/debts were real, where are the assets that were purchased with the proceeds of said debts?
If the debts were for services, why was there never any revenue from any said services?
The common shares are decorative, since they have no control over the company and there is no revenue from which dividends could ever be paid out of.
Louis J. Desy Jr.
Visit from the Sheriff Officers? Are you being sarcastic?
Why would they send the sheriff over with an interdict (I assume this is a local term since I am not familiar with it, is it some kind of court order)?
Who exactly are Randy and Stephen and Tracey?
What exactly could you have said in any letter that would justify the 'interdict'?
Louis J. Desy Jr.
Succeed at every step? HDSI fails all the time
This company has failed at everything they do, except selling decorative common shares to retail investors. That always seems to go well for the insiders.
This company is so messed up that they can not even filed 10Q reports, even though nothing appears to have been going on (no revenue) in Q2 and Q3 in 2015.
The idea that 'all of a sudden', someone out of no where would want them to run a product that has any real value, is unbelievable.
Louis J. Desy Jr.