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BDCO - Thank you! Yeah, Neste is the one I couldn't think of. In my head, when I'd go to check it in the past, I'd say to myself, "let's check on the candy bar margins." And then when I lost the link I was trying to remember why I was saying that (it's becuz Neste is just one letter away from Nestle). So when I couldn't find my link, I was like "Snickers, Baby Ruth, Milky Way, what the heck was it?" haha
BDCO - Yeah, maybe he's thinking longer term is about all I can think. By the way hweb, I seem to have accidentally deleted my bookmark last night for the diesel crack spread charts and jet fuel prices. Could you please post again if you have it handy? I think I got it from you and it was my favorite layout for those prices. Thank you.
BDCO - CEO bought another 10,000 shares at around 2.50 :
https://www.sec.gov/Archives/edgar/data/793306/000165495423004554/xslF345X04/section16.xml
SEAC - Yeah, and just generally I could never quite figure out the Singers' method. In all their companies, seems like there's always insider buying and then the shareholders get screwed while the Singers live in big houses in New Jersey
SEAC (.44) - This perennial disappointer claims to have made .03 in Q4 and had a transformative year. But the connection to the dubious Singer family keeps me away:
https://www.sec.gov/Archives/edgar/data/1019671/000095017023011929/seac-ex99_1.htm
Anyone follow this one closely?
Gold and tons of gold stocks hitting new highs. No one knows for sure, but that's generally not a good thing. Might be investors sensing continued inflation, or a worsening of the banking situation, or countries shifting away from trusting the dollar as the reserve currency.
BRN - Anyone know why the sudden price jump? I couldn't find anything
LMB ($17.45) - Old board favorite hitting new highs. Bot some in the 11's and sold recently in the low 16's after it had a spirited run-up. Seemed fairly priced. Was hoping to buy back on a pullback, but it just seems to keep inching higher. Their gameplan took a little longer than expected to come to fruition, but seems like hitting their stride. To refresh memories, this is the one that in 2/21 did an offering at $12 seemed like had everything going for it, then turned in a horrible quarter and almost immediately thereafter the stock slowly declined to $5
Yeah, that's kind of what I was thinking. Looked like someone had a margin call because of some other security, and other positions in their account got liquidated to meet the call.
BDCO - Yeah, sort of odd, they filed an NT this morning saying they'd be late with the 10-K, and then filed the K shortly thereafter. ha. Haven't gone thru the whole thing yet, but I like that they at least have 500k in cash now.
KOLD and BOIL - Yeah, and the options on those things just have the potential to move sooo far sooo fast. On KOLD for example, yesterday a newbie might have sold the 70 puts with one day to expiration thinking, "what are the odds this thing is gonna move more than 10% down in a single day? Easy money." And today, especially this morning, it doesn't seem like such easy money.
BDCO - I too noticed the jump today in anticipation of earnings. But, yeah, it might end up being a "sell the news" scenario
NG - Interesting quote from Bloomberg article titled, "America’s Ballooning Gas Output Needs a Release Valve":
"As shale oil wells mature, they become more gassy. One energy executive said this is already happening in North Dakota, where gas output is near record levels, even though crude production is down 25% since 2019."
Full article:
https://archive.is/Ml5zn
NG - With all of our gloomy natgas talk this morning, it'll probably turn out that we called the exact bottom. Ha! That chart on BOIL is something to behold, though. I just don't have the stomach for those 3x etfs. The moves are so fast. Even on that long move up with KOLD, I bet I would have sold out on a sharp drop on the way up.
NG - Reuters reporting Freeport LNG set to reach its highest gas flows since restarting. But Reuters was the same outfit that a few days ago said a bunch of cargoes had been canceled. So who the heck knows. (Either way, not much affecting the downward trajectory of NG price):
https://finance.yahoo.com/news/1-us-natgas-flows-freeport-113902340.html
Another credit card offer 29.24% APR -- what a sweet deal! Banks are putting the loan sharks out of business.
2008 vs Today -- Whether one believes it's similar or not, I thought this was a good chart to help remember the timeline of events in 2008:
During today's press release, Powell asserted that Silicon Valley bank collapse was an "outlier". So he is ignoring all of the dominoes falling, exactly as the Fed did in September 2008 when Lehman failed🚨
— Wall Street Silver (@WallStreetSilv) March 23, 2023
Ht Zen second life pic.twitter.com/vuSXBR81Sb
NG - Reuters cites "sources" as saying that Freeport LNG is having some hiccups and canceling some scheduled cargoes:
https://nationalpost.com/pmn/news-pmn/disaster-pmn/freeport-lng-cancels-some-march-cargoes-on-restart-hiccups-sources
PYXS - RN and gil, I think you guys have it right. It appears to be Pyxis licensing from Pfizer and this was a payment to Pfizer, which gives it a different perspective. Could still be a good thing, but common sense suggests Pfizer isn't selling off their best drug candidates. Who knows, maybe Pfizer loves the Pyxis team and thinks they could do it best. But might also be some house-cleaning on Pfizer's part -- sell off (for cash and shares) the drug candidates that you're not that high on so you can focus on the good stuff.
Pyxis had couple hundred million in cash in last 10-Q, but also burning thru it at a furious pace of roughly $100m per year, so might be down to $175m now.
Thx RN and Gil
Been a long time since I've looked at this one. Any place you can point us to that gives a quick synopsis? Any idea which of their drug candidates Pfizer is most after?
PACW (10.15) - I don't know enough about it to take the chance, but just noticed the put premiums. The Mar 31, 8.50 puts can be sold for .95
That's for a just over 9 trading days!
FRC - Here's another sleazy bank regulatory rule I wasn't aware of. Banks, if they want to be complete douchebags, don't have to report insider sales to the SEC. Instead, they can report it to the FDIC (where no one looks) and go unnoticed. I certainly didn't know that. FRC insiders have sold about $12 million this year. Friggin dirty:
WSJ article:
https://archive.ph/wnuW0
Good thread, reminder of how things went in 2008 and how/why/when that might apply now:
A lot of people weren’t there in 2008 or otherwise forget or misremember, but the Fed caught a lot of shit for Bear Stearns because they guaranteed $30bln of the worst pile of MBS sht you can imagine in exchange for JPM $2/sh bid — the BSC Madison Ave HQ alone was worth more. 1/8 pic.twitter.com/hGKWt4lWii
— Paulo Macro (@PauloMacro) March 13, 2023
Then I guess there's no reason for them to be in bankruptcy, right? Liabilities are not on the income statement. I'll let you believe what you like.
Sure, anybody can appear profitable if you're not paying your expenses. If they were paying their debts, they wouldn't be profitable.
But they've already had phony financials before, then they blamed the accounting software for adding in numbers. One of the most ridiculous things I've ever heard.
Rating Agencies - Everything has crashed, we totally missed it, so now NOW we're downgrading everything to make it look like we're on top of things.
SVB - When the govt makes up new rules as it goes along in order to bail out bad actors, you end up with a perverse incentive/reward structure. Silicon Valley Bank is now arguably the safest place to put your money, as all deposits including new ones are insured up to any amount:
https://www.svb.com/news/company-news/update-from-silicon-valley-bridge-bank-ceo
SIVB was corrupt, in my opinion. CEO Becker was on the Board of the SF Fed (now removed). He's no dummy, he knew exactly what he was doing. He was vastly overstating earnings and misleading people by not taking losses along the way. He lobbied for the rule changes for banks his size. He destroyed the savings of his stockholders by taking absurd risks that should never be taken by a bank. Reckless, willfull misconduct, and gross negligence for someone in the banking profession. In order to stay out of prison, he should be forced to give back (to his stockholders) every dime of money he made from stock sales over the last 3 years, at least. Should also have to personally pay back to stockholders the bonuses he paid out to employees right before the Fed's shut them down. That's not his money to be handing out -- that's shareholder's money.
If he wants to run the place like it's his personal kingdom, then he should also be held personally liable and sued into oblivion. He profited and others responsible bankers (and ultimately the public) are forced to take the losses. Disgusting.
Short Seller Marc Cohodes probably had a fair amount to do with the closing of Signature (SBNY). He's been contacting regulators for many, many months regarding FTX, SI, and SBNY with documentation that these 3 were essentially criminal operations, that they were knowingly engaging in money laundering for large drug cartels, etc via crypto
SIVB - Suddenly, tons of banking experts! ha. After the fact, all the smug media blowhards come out and act like everyone should have seen this coming (when they themselves didn't see it coming, nor warn in advance). Also, the rating agency Moody's downgraded SIVB on Friday, so the rating agencies have proved their worth once again.
I am admittedly NOT a banking expert and had no idea of this HTM designation that could avoid mark-to-market scrutiny by regulators, effectively allowing a bank to hide both losses and liquidity issues. In the case of SIVB, it sounds like they also removed all their interest rate hedges in 2022. From what I've read, larger banks face tougher regulatory scrutiny, both for liquidity, interest rate risk, etc., and would not have been able to do this. Have no idea why the rules are this way for smaller banks, but they are. A bank of SIVB's size is also required to have a Chief Risk Officer, and for almost all of 2022 they didn't have one. This suggests to me that they knew exactly what they were doing, were completely arrogant, had almost no respect for the risk they were taking with customer deposits, and operated more like a hedge fund -- making a gigantic bet on interest rates moving back down. With their own money, however, mgt appears to have been well aware of the risks and insiders sold a good chunk of their shares. So this does appear to me to be a case of the bezzle.
One writer suggests HTM should be referred to as Held-to-Mortem and I would tend to agree. I'm shocked that this is going on and allowed. Reminds me of learning of Special Purpose Vehicles (SPVs) during 2008. Remember those? I was like, seriously, you can do that? How the heck is this considered legal?
FT had a good article on the banking regs for different size banks:
https://archive.ph/gmJxU
This gentleman did probably the deepest dive on SIVB:
https://nongaap.substack.com/p/sivb-held-to-mortem-governance
In 2019, a Board Member of the FDIC warned that rule changes could lead to risks for large regional banks and FDIC resolution of those banks:
https://www.fdic.gov/news/speeches/2019/spoct1619.html
ROKU - Yikes, after hours company says they have $487 million at SIVB:
https://www.cnbc.com/2023/03/10/roku-says-26percent-cash-reserves-stuck-in-silicon-valley-bank.html
Held-To-Maturity (HTM) Regulations. I don't follow bank stocks much, never could understand the accounting or all the regulatory rules. But the most shocking thing to me in that thread was:
"regulators do not force $SIVB to mark HTM securities to market."
I certainly didn't know that. I'm shocked that it works that way and is allowed. What good are the bank regulators if that's the case? You can be sitting there basically insolvent or with huge losses and the regulators don't say anything? That's shocking to me.
SIVB - Excellent thread written on Jan 18, 2023:
Silicon Valley Bank $SIVB reports earnings tomorrow
— Raging Capital Ventures (@RagingVentures) January 18, 2023
Investors have rightfully been fixated on $SIVB's large exposure to the stressed venture world, with the stock down a lot.
However, dig just a little deeper, and you will find a much bigger set of problems at $SIVB... 1/10
Yeah, who knows how it will all shake out, but investors may be starting to take the deposit insurance levels more seriously already:
What a "flight to safety" looks like... pic.twitter.com/NQGluMr4zf
— Charlie Bilello (@charliebilello) March 10, 2023
The bezzle.
I suspect there will be many more financial shenanigans to be discovered. Not speaking of SIVB or even banks in particular, but just companies in general. Those of us old enough to have gone thru the internet bubble can remember the slow unfolding of discoveries. One day you wake up and read a company is doing something called "vendor financing" where it turns out they weren't selling products for cash, but were financing their customers. All this supposed revenue was in receivables. Sheesh, I didn't know that was going on. Then, oops, turns out it was rampant throughout the tech industry and a lot of the revenue would later be recanted. Then insiders were getting stock options hand over fist, but not expensing them in any way, vastly overstating earnings, leading to higher stock prices. You find one was doing it, then discover it was rampant. Then they'd own shares in companies coming public, purposely with a low float, the stock would skyrocket, and the gains on those shares would be counted as earnings. There was all sorts of shady, questionable stuff. It was boom times.
Good time for all of us to re-read John Kenneth Galbraith's description of what he referred to as "the bezzle" in his book The Great Crash 1929: