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Natomas:
Wouldn't you think that Tronox would have higher implied volatility than JPM?
If Tronox is acquired by another company, do we lose the time/volatility premium in the warrants?
This was in the Dupont earnings release:
It said it is evaluating a "significant expansion" of its titanium dioxide business. Global capacity to make the material, which is used in automobile paint, is extremely tight. Key DuPont competitors in making titanium dioxide include Huntsman Corp (NYSE:HUN - News) and Tronox (Other OTC:TRXAQ.PK - News).
(Reporting by Ernest Scheyder; editing by Maureen Bavdek and John Wallace)
I have no insider knowledge, but I am starting to think there is already some kind of deal in the works to sell this company as it emerges from bankruptcy.
Any thoughts on that?
I have to admit, if you use KRO as a comp, it's hard to get a $782 million market cap for Tronox. Can KRO's market cap be nearly three times Tronox's? KRO is thinly traded but the recent capital raise confirmed current valuation.
One could argue that KRO is considerably overvalued but a comp is a comp.
Tronox has some nice qualitative factors as well: clean of environmental issues, Asian proximity, etc...
A valuation fight!
Pinkyring: Another angle. What would it cost to build production facilities similar to Tronox's in the same key geographic locations? Would it even be possible? Might someone pay a premium for those assets? Kronos showed that it's not difficult to raise capital now.
Another question: If the warrants were at (or near)the money, what would the seven years of time value be worth?
See post 5619.
This was filed last week.
It is strange, however, that if there is some big insider news, Lagrange would not be privy to it.
According to 13D filing, Lagrange Capital sold shares on Thursday @ 64 cents.
300,000 shares total (three separate funds).
To the earlier discussion: I'm just posting factual info to help everyone. I haven't sold any shares and I don't mean to be negative. But I don't see this as a cheerleading board. I don't think anyone should feel intimidated to post any opinion or facts (positive or negative).
Jaxstraw, specifically, has posted a lot of info and analysis on legal questions. His (her) efforts have been much appreciated. I hate to see the kind of posts we had earlier today.
Onward and (hopefully) upward!
Is it possible the deal with the EPA is being restructured?
Hard to explain the action in the bonds.
I think I can summarize it in one word: Ughhh!
Today we found out that Cetus had dumped its shares. Then we saw the creditors' objection to the EC plan. And to put the icing on the cake, the EC voluntarily amended its plan, lowering the shareholders' recovery.
Oh yeah, and the shares were down 25%.
Tomorrow is another day. Let's look forward to Thursday and hope for some good news.
Cetus got a quick double and sold out.
But does that change the amount of the backstop ($185,000,000)?
My apology, Zilla. The low end of the EC was stated as $1.39, not $1.25.
I simply proposed that in a compromise resolution, this low end figure could be cut in half. A new buyer would supposedly be looking for some margin for error.
I've been a shareholder since May '09. Hoping, like you, for the best.
Not sure how to look at this. From what I have read of the judge, maybe we should expect the final resolution to be somewhere in the middle of the Tronox and EC plans.
That would put the low recovery point at approx 63 cents. In that light, the current trading doesn't seem so crazy.
What's the bond doing today?
Is this now down to just a battle over how much this company is really worth?
When will we see the details of the EC plan?
Any chance Uncle Sam is willing to take a smaller bite?
Kronos up $5.
Pretty depressing if the the final agreement is somewhere between Tronox's ridiculously high "bid" and the government's ridiculously high "ask".
"... on July 1, 2010, the Equity
Committee provided a proposed term sheet to Tronox and the United States. Tronox continues to review
the proposal."
The EC is not permitted to release the proposed term sheet to the public?
Also, Tronox continues to review the proposal. Does this mean the US gov't has rejected it?
Why hasn't the EC presented its own plan?
If the EC doesn't have a plan of its own, what leverage does it have with which to negotiate?
Why hasn't the EC been able to formulate their own POR?
I'm sure the SEC could care less about insider trading in a bankrupt, pink sheet stock, but I sure am curious about those two 150,000 plus share blocks that traded (back to back) on a downtick late last week.
If insiders know the shareholders will be shortchanged in the POR, why aren't the bonds trading better than they are?
Another question for everybody: Tronox's business prospects have improved greatly. But given all of the uncertainties, what do you think the true value of the common is today?
Persistentone:
I inquired about the same possibility (of an APC bankruptcy) way back at post 3629. Nobody seemed to mind.
Nothing wrong with doing your homework. IMHO, asking about negative issues helps everyone think this through.
Are the Tronox bonds trading significantly lower as well?
Thank you Newtech and Uhlmant!
Could Anadarko's potential liability in the Gulf oil leak be having an adverse impact on Tronox?
The deep pockets that were going to take care of Tronox's environmental liabilities might not be so deep? Noticed some APC debt downgraded to junk.
Kronos back to nearly $20/share.
From Uhlmant: Keep the end goal in mind. We KNOW we have value.
Exactly. We know we have a valuable property here. We equity holders just don't know how much of it we own. Last I heard, the Tronox bonds were not appreciating sharply. So apparently, the bondholders don't know how much of the company they will own either. The good news: we'll soon find out.
In the meantime, maybe this lower pps makes sense. The stock is trading at a level where you won't get burned too badly unless the equity holders are shut out completely. And, after a global market meltdown, accounting issues, oil disaster, etc..., maybe some Tronox holders couldn't afford to get badly burned.
As long as the current pps doesn't affect the court's perception of the company's condition, why worry about it?
How do you identify transactions as either "buying" or "selling", when there is a buyer and a seller in every transaction?
Uhlmant:
Sometimes these companies have thousands of VPs.
For those procedural experts:
With emergence from bankruptcy so close, should we be worried that the FRBP examination signals that the EC (at this point) doesn't believe it is getting a reasonable share of the company?
Is an FRBP examination traditionally seen as an act of desperation?
Thanks!
How much of an effect does everbody think the lower stock price will have on the bankruptcy court? In the valuation letter, the stock price (over $1 at the time) was cited as important evidence of shareholder value.
Somebody puked up a boatload (198,710) at .57.
Changing auditors is a red flag for many investors. The reflex action is to sell.
That doesn't seem warranted by the circumstances here.
May 28, 2010
Securities and Exchange Commission
100 F Street, N.E.
Washington, DC 20549
Ladies and Gentlemen:
We have read Item 4.01 of Form 8-K dated May 18, 2010, of Tronox Incorporated and we do not agree with the description of the events reported in the second paragraph. On or about May 5, 2009 we advised the Company and the Chairman of the Audit Committee that we did not believe a sufficient reconciliation had been performed between indications that the environmental and other contingent liability reserves may have been understated (as reported by the Company on Form 8-K on April 13, 2009) and the Company’s previous accounting and reporting for those reserves. Such reconciliation would have provided information with respect to the adequacy of internal controls including disclosure controls and the possible need to restate previously issued financial statements. As of this date we are unaware if such reconciliation has been performed. On May 5, 2009, the Company reported on Form 8-K that the 2007 and prior audited financial statements should no longer be relied upon. Without the reconciliation as referred to above, we were unable to agree that the Company had a sufficient basis to determine that the 2007 and prior financial statements should no longer be relied upon. We agree with the statements made by the Company in the first sentence of the third paragraph regarding our report on the 2007 financial statements as originally issued. Further, since we have not performed an audit of the Company’s financial statements since 2007 we have no basis to agree or disagree with respect to the statements made by the Company in the third paragraph covering the fiscal years ended 2008 and 2009 and the period through the date of this report.
/s/ Ernst & Young LLP
Pinkyring: exactly right.
You don't get the sense from this low volume that the sellers have any better info than we do.
As long as the Tronox story is intact, these selloffs are just opportunities for those of us with uninvested cash.
How are the Tronox bonds trading?
Wish Tronox would have been mentioned in that WSJ bankruptcy story.
Good sign that the bonds are coming down from 130? Are the bondholders beginning to realize that they aren't going to own this company?
How much of the reorg'ed company would the bondholders have to get to justify paying such a large premium to par?
Isn't the bond trading to $130 a bearish sign? At some point (after accounting for accrued interest) the bondholders' interests diverge from ours. We are both fighting for our share of the same pie.
The higher the bond trades, it seems the more of the company the bondholders expect to receive.
Is that correct? Thanks.