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see, that's good news right there LF. I knew our crack team of bulls would eventually start picking this apart for oppo views.
Yeah, and here's one place I sorta disagree with LF. I would think that with larger loans come better rates, so we could have better financing than Mako's. However, it's all about the risk as to what rate and loan terms you get. If DPDW is deemed less riskier than at the time of Mako, we should get better terms and rates. Since LF sees another big acq as more risk, he would be happy to see us get even our last terms and rates, preferably without stock for collateral. This is why accountants make good money. They are trying to show the lender we are less risky now than we were then, more established, with more revenue streams within our grasp. Hell, if I keep talking, some mainstreet bank may think it's a good loan at prime.
to bluntly address your product concerns, let's just say they make the stuff that costs alot, sells for alot more, and are key components to the art and science of pulling the black gold out from way under ground and way under sea. the potential here is for huge pools of money to be swimming in, and that is what causes the neglect (for lack of a better term) of issues you raised on the other side of the business: the financial side. Hopefully someone soon will swim by and pull me out of the money pool and explain to all of us how your dire scenario really is not so dire if all goes according to plan. I have a feeling that all that money I mentioned above is a part of that plan.
LF, it sound like the company financing you refer to in your post is a loan with an adjustable rate at prime, as you said it began around 7 and is now down to 5 (the U.S. prime rate). Again, that's a ballpark we aren't invited to play in.
chev, the commercial financing barometer is typically NY prime. depending on the risk, percentage points are added or subtracted. hence the terms prime + x, or x below prime. now, that's "regular" business banking, and the prime rate currently stands at 5.0%. A typical commercial real estate construction loan might currently be priced at, say, prime + 2 or so. We are so far from that kind of banking it's not even funny. A regular bank would not typically take bonus stock for collateral, regardless of the discount. Your question is another one that Mr. Haag might be able to either handle, or point you to someone who can give you investment banking rates based on risk type. If they base off prime, it must be like prime + 10 or so. Note also that although the fed recently cut the rate by .25, lending rates did not correspond, and the yield curve is steepening. that's right, rates are actually inching upward now, even when the fed cuts. None of this answers your question, but it was the only shot i had of saying something tonight i know a very small amount about. are you still drinking?;)
LF, nice post. While all may not agree with your sentiments, your post is a great example of a reasoned, more bearish position. It provides good insight into some issues, particularly bonus shares and their dilutionary (is that a word?) threat, and your advice to keep an eye on their trigger date is well taken, by me at least. I have always fancied myself a DPDW fan, but when it comes to the particulars, others here have much more experience than me. I would hope that some of our smarter bulls take the time to give us some equally well-reasoned counters to your particular points, or, concede them if they can't. Though I heed your words of caution, I have reason to believe that Mr. Butler and his team have your angles adequately covered. Frankly, I would not mind seeing any of the regular posters here not only give their best address of your concerns, but forward same to Mr. Haag to allow the company to address them in whatever way they deem fit. Their history of candor should have them pleasant to do so. Thanks again, and in the words of Ali G, much rispeck.
man, that is some awesome technology we are acquiring with FT. that last photo is an impressive display of customized molded flotation.
personmark from me DFL.
littlefish, when it comes to risk, some see the peril in not making it, while others see the end reward. we should all see both. as for "having almost no financing in place" for the FT acq, how do you know that? ddi has not broken a PR promise to date, not once. no credit for that? i think they are very aware of their honest reputation, and they would not announce an intended acq without being very far along with the financing. if it's like the last, we know you won't like it;)
how did i make your point? i didn't bash you. i asked what point you were trying to make by saying that neighboring businesses somehow "looked" better than ours. this is the discussion you claim to want to have about the company, so you should answer that question. ok, so it's not a "campus" in your book. so what? what does that have to do with the business model, or the tea in china? maybe you deserve some credit for belatedly saying you stand corrected about the list, and i too don't like cheerleading for nothing. but you can't come in questioning an easily verifiable fact and basically calling the whole company a bunch of liars about being at the OTC, then make comments about how unimpressed you are with the facility, and not expect people to defend their investment (which is different than cheerleading for nothing). surely you know this.
dude, we're not a barge company. if we were, we'd have a waterfront lot with barges docked in front of it. or maybe we wouldn't. by the way, i live in the oil patch and there are alot of companies here that look like the one you describe, but they can't find their ass with both hands. what's your point? you wish our place looked more like what, going into year 2? our customers don't have any problems loading our products onto their vessels from our location.
I agree jd, most impressive. now we're into the particle analyzing field, which, by the way, the whole umbilical industry (among others), needs like earthlings need air (and oil). A hundred people guessing at what DDI would do next would never have guessed this, but these guys know the important pieces to acquire and assemble. All of us can see that they are gathering high demand/low supply components of deep sea O&G work. There's gonna come a day soon, a day real soon, when we are THE playa every big boy wants on their team for their next installation/project. We're halfway there already. Go DPDW Go! (just for you, jd)!!!
presidents (if that's what you mean by "elect") don't impose any taxes, congress does. last i checked, the big oil lobby has that all sewn up. as for our facility, i'm sure mr. butler remembers the weatherford facilities well. ours will change, and improve, as we grow, and as needed. i think that was your point.
looking very good for us, all things considered.
oil can decline by more than $40 and it would still be profitable for this sector and still spur exploration.
close?
well, the delayed quote shows we're right back up, so that didn't last long. don't know about real time though.
is there enough real selling volume here to push us down a few tics like this, or is this MMM BS? hard to believe folks selling much of this right now. crazy imo. but i guess everyone's got an agenda.
Brikk, for those of us without L2, can you give us an update along with your excellent analysis/interpretation of what's going on today? TIA.
I'm not complaining. We've been accumulating for a good, long while. I like the slow, steady climb. However, I think it will eventually show you that it's capable of a steeper grade. I've bought it at all levels, 3, 4 and 5 baggers have come and gone, and that's great, but irrelevant to my point, which was simply that we are capable of better performance and we should be seeing that soon. This opinion of mine should not be construed as a complaint.
i'll go ahead and say it: i'm ready for a much steeper uptrend channel. all this accumulation talk is great, but in my mind we've been accumulating since about december. it's about time for this horse to show what it can do, and we all know what it can do. i'm not getting my hopes up, my hopes have been up since october. we've all been very patient here. we should be rewarded for our ownership support and stake. thankfully this is a real company that will actually reward us. it's just a question of timing. and i think its about that time.
no boundaries.
clay, when are you doing another video chart for us? thanks for all you do.
The ibox live feeds idea is awesome dude! Why did it take any of us so long to figure that out? Well, I know why for me. Major breakthrough there, Sage. I imagine that you and the guys will quickly make it even better, bigger, quicker, whatever, and also tweak with the most effective locale for it in the box. Looks good at present. Thanks.
hence, a lesser need for banks.
new acqs could start falling to us like dominoes, pulled to us like planets to a star.
heh heh. flotec's gonna blow our training wheels right off. think what it will mean to us if they close the deal quickly and we can add some of your stuff to our 08 ye revs. suddenly, i can see 80MM!, just like that.
hank, i'm glad you're here. and that's an understatement.
yeah, i just don't think most banks are going to feel comfortable financing in this area. i think they've already grown past bank financing numbers anyway, unless they have an in with a huge one, like citi, chase, etc. not many other banks can loan $20+MM on short notice without real estate collateralization or similar. this is a different animal, with different rates, and it is likely to be short term, which also explains the rates.
i agree 4mars, and you know what's nice: every time a new face shows up with a bunch of relevant questions, the collective answers from the board always make me feel that much better about our investment. great post, uncleremus, btw.
while you're digging, you should check out that little company named Weatherford.
littlefish, why does it strike you as odd that they announced an intent to buy flotec without first announcing financing terms? that's exactly the same way they announced their electrowave and mako acquisitions, and those were successfully closed. i don't know of any promises ddi has ever made that they haven't kept. in fact, other than their acquisitions, they don't announce things until after they've done them. the exception with acquisitions is simply a higher form of transparency. ddi has always overdelivered. you might want to take your doubts with that large grain of salt. as your own siggy indicates, this is probably not your cup of tea, because the plan here is to get bigger and more complicated. good luck making money with the small, simple firms. in keeping with your investment philosophy, you probably won't lose too much that way either.
Rawnoc, your concerns are valid, but let's also try to look at this in ways that might be a bit outside the box, especially to someone who is self-admittedly very conservative. Frankly, it's over my head too, and same probably goes for most of us. I do think, though, that the world of corporate high finance may be a tad more complicated than a simple interest rate, high as it may seem. Anyone who has been around here any length of time knows I'm not the biggest fan of Prospect, and I've wanted to see DDI move to traditional banking with traditional interest rates. However, frankly, they've probably blown right past that window for the most part. It will likely be corporate financing and investment banking for the most part from here on up. The rate may be higher compared to conservative normal banking, but we aren't in that world and probably never were. What does a 15% rate mean exactly when a company is doing over 100% yoy with revs in the 20, 50, 80MM range, and that is just starting out? Not to go back to the buyout scenario, and not that one can count on that anyway, but that is just one of many outcomes here, and that kind of debt is peanuts to the big boys. DDI's growth rate would appear to eclipse their interest rate by a large margin. I know it's not that simple, and debt and interest on debt are real, but the guys running the show seem to be doing outstanding so far.
jd, it could be just as likely that by the time we threaten to trade at a $10 pps we could be gobbled up by a big ol company that trades at $100 pps. nostalgia aside, that could be just one of many end games here, and that probably wouldn't be a bad one.
feelin giddy again. like i did on the first ride up to 2.+. i thought $2 was cheap back in 10/07, so i think $2 is doubly cheap now. for any fence-sitters out there, just know there are alot of us who bought chunks of this stock at all levels, like me, from .68 to 2., and we are all still here. i'm not going anywhere. so hopefully that should make those who buy at .90 on up feel even better. i'm parking my tax rebate here too.
have yall crunched the numbers on the new aqcuisition? we know the sale price, so after accounting for that, i'm wondering what our FMV should be for our PPS going forward. TIA.