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Ilene-
Get a hold of the transcript. It seems like they are more than willing to lose 100% of their $40M than spend another $4M which may be enough to get their money back.
Granted it may be posturing and common sense should prevail but I'm not taking it for granted.
Ilene-
I actually think the opposite. Reading the transcript of the first day motion is appears that the DOE does not want another Solyndra in their hands and therefore being overcautious.
The DOE is putting this company and themselves in a bad/difficult situation. They have given and BCON has spend $39 of the $43M but are unwilling to spend more as they are having trouble determining if the work that BCON is requesting it for is for the plant or for something else. The problem is that BCON has $15M in annual operating costs that are mostly things that are hard to break out. Does the engineer one have on payroll may spend 100% of their time this week on the project but next doing design improvements that should help the next design. Its all interrelated but if they don't get if figured out the plant is probably worth $20M or 50% of the DOEs loan.
I fully expect this to be sold in a sale as a buyer would need the people and the IP. The problem is figuring out the real revenue and how many plants are real potential.
I think a big difference is that GMCR never made much in actual cash even during the run-up. Check their cash flows. (follow the cash)
Add in the fact that the number of k-cups sold per machine is decreasing meaning top line sales of machines @ breakeven are not translating into more k-cups sales.
Also add in concerns about channel stuffing which was the point of the initial short by Einhorn, not it coming off patent and I think they are different stories.
A different but for me relevant comparison is MAKO to GMCR, the stock has taken off on the assumption of the razorblade model but they are not selling more razorblades per machine.
Mike (a former MAKO shareholder)
Absolutely its very good to put it out there.
Here is a decent article on it for others to read.
http://www.bloomberg.com/news/2011-11-07/olympus-used-gyrus-fees-to-hide-losses.html
Even in BK I personally want to see a decent mgmt team which these guys aren't. The audit will be amazing as we are talking this supposedly was happened by 3 guys without anyone else knowing. I can't buy that. Others had to know.
But on the other hand the business is being valued right now $2B and it has $5.4B in LT debt for an EV of $7.4B. The business makes nearly $1B in profits mostly in the endoscope business and not the camera side that we all think of.
Add in a potenital delisting and it may be worth a small gamble.
This is a very interesting case that I read about on another board, not on I-hub.
Turns out they made $700M in bad investments and used borrowings to hide it. I couldn't invest in that mgmt team and as a foreign shareholder who has had intimate dealings with Japanese and Korean defering to mgmt structures I can see how it happens but I can't see how i could invest in the company as you don't know how deep the bullshit lies.
Thanks for your thoughts.
You are correct in that the senior bonds are price plus FJR.
The problem I have is that the Seniors should not dropped much since they presumably be made whole via the HUQ security. I would have expected HUQ to drop once it did, (and I fully take responsibility for not understanding that fully when I purchased in the 6s and 4s). However with HUQ dropping to the assumption that they will have to pay the Senior back due to the subordination clause why should the Senior's have dropped. Its almost as if Hundreds of millions of dollars disappeared in total.
One of these is wrong:
Either seniors gets paid in full via subordination clause via HUQ and it is underpriced and HUQ is screwed.
or
HUQ doesn't have to pay subordination and Seniors are fairly priced while HUQ is underpriced.
While part of the HUQ issue is each month hits them double that has historically shown up in a slow bleed in their stock.
Do you have any thoughts on how the senior bonds droped based on the FJR news and the WAHUQ droped as well. One or the other should have dropped, not both?
I actually think he is stating this line ties up to class 18.
Robo-
Do you know what happened with the $24 million DOE Smart Grid stimulus grant to support a plant in Hazle Township, Pennsylvania?
My understanding is that in Q2 they moved form phase I to phase II and therefore were eligible to use up to 95% of those monies to construct a second flywheel facility there. However per a 10-k filing in early October this was filed:
http://www.sec.gov/Archives/edgar/data/1103345/000110465911055820/a11-27570_28k.htm
Why would they hire someone to identify financing for the facility if they had received a grant which was to fund the contstruction of the same facility?
That said, commons appear to be toast and the only LT debt is with the gov (Fed and Mass) so there is no play there.
That said, what is the Stephenson asset worth? Based on the last quarterly filing Stephenstown brought in $300/quarter or $1.2M with Gross margins of 56%. In Jan they were at 8/20 and by mid June were at full 20/20. Lets say they want to get a 6% ROA on the asset which is low. They would need $4M in Net revenue with 60% margins that is $6.9M in annual revenue or over 400% higher than their revenue in Q2. Is it possible, maybe as we don't know full operating revenues but if their installation for Jan '11 to mid June was flat then as of April 1 they should have been around 14MW or 60% capacity. Assume that for the quarter and you get maybe $500k in quarterly revenue. Be kind and add another $100k for delays due to conversion and you are still only at 1/3 to hit an ROA of 6% on Stephenstown.
My guess is someone will make some money on this in future but I doubt its current shareholders.
Thanks for the correction. My information was from earlier in the year. You are correct in that they utilized 39 of the $43M loan. This may be the article you were referencing.
http://www.reuters.com/article/2011/10/31/beaconpower-bankruptcy-idUSN1E79T09Q20111031
My understanding and this is a few months old is that while they had received a $43M loan they only had access to $11-15M at this point.
Thanks for the update.
I thought that Beacon was going to make it based on the most recent DOD stuff. Will have to order it myself.
I'm a shareholder in some other energy tech and short TSLA so this fits in my wheelhouse.
Thanks for the video recommendation.
I wonder if we have another crash if the solution will not be to bring back floor traders. A MM provides liquidity where a computer cannot/will not in times of panic or europhoria.
sounds good. You may be right. Too often on these boards you hear stuff like "The MM playing games with shorts" or "Load up, its going to the moon one the shorts are forced to cover".
Could it happen like we saw with VW/Porsche back in the day. Yep. But quite often its at best lazyness on the side of the poster or outright lies on these boards in an attempt to extract money from some poor sucker on here.
Side Note: While Overstock.com CEO is correct on much of his complaints and I believe there are great abuses of the market by the wolves toward the sheep (retail) I believe Overstock's CEO should focus on his business than blaming shorts, etc. Eventually there will be real price discovery but yes I agree it can be bad in the short term especially for companies that need access to capital. This stock does not have that need.
BTW, I think that is the Fiskar Karma. A beautiful car that I hope never sees production as its a waste of batteries. Too heavy. Take out the battery pack and give me a CNG engine and I'd be a happy person.
I really should not join this conversation but based on the bi-monthly reports there is basically no shorting of this stock. Could there be intraday shorting, yep you bet, but its probably a posiiton put on as a hedge to a net long position.
The way a short squeeze really happens is when retail/HFs is a large % of the float and you get rolling margin calls, see Porsche/VW a few years back. Who really wants to be short a illiquid stock such as this. Its immaterial imo.
I see lots of stuff on these boards about shorts holding prices down when price goes against them but nothing when it goes up. Fact is this stock is a binary play that is hopefully coming to a close after 3 years. Everyone who wants a position probably already has it and there is exhaustion over time.
BTW, Hroller- You say that you are using this data to see how a stock acts after a certain period of time. Do you have a thesis and have backtested it and checked correlations? I'd be curious to hear what you come up with. I've never looked at pink sheet stocks since I can't short them (being retail) but I've never found a strong correlation between them and a stock beyond a few days and have usually failed under backtesting.
Thanks Grudge for the recap. I simply thought of it as a binary outcome 12 or 21 and the however remote threw a wrench in my tree.
Phillipmax-
I pruned a position not because of the case but prudent money management. At one point when this was over $.90/share It was a much higher % of my investible securities. Strange things happen and I've found my money management rules must be followed otherwise I get greedy and become a pig. We all know what happens to pigs. Sadly, it became too large of a position as my other securities went down not because it went up.
I had been struggling with us being placed in class 12 as while we won the case there is still an appeal pending which in my mind placed us in a different class than Joe the plumber providing work to fix a plugged toilet. My logic was based on the belief of lets say we won, were placed in class 12 and received a payout based on such, yet JPM losses their appeal. (Don't scoff as Benjamin Franklin Bank won $54M and then lost on appeal years later).
If one is a regular contributor to the board can someone please talk me down off the ledge of 18 vs 12 WHEN we win. I am not concerned about the merits of our case as if one was we wouldn't be here today.
We know that as of September (outside of mediation the waterfall stopped at Class 16). Each month that waterfall slows down a little more (a lot more for PIERS as they have truck most of the water back up the mountain).
Found the list of classes:
Class 2 Senior Notes Claims
Class 3 Senior Subordinated Notes
Class 4 WMI Medical Plan
Class 5 JPMC Rabbi Trust/Policy
Class 6 Other Benefit Plan
Class 7 Qualified Plan
Class 8 WMB Vendor
Class 9 Visa
Class 10 Bond
Class 11 WMI Vendor
Class 12 General Unsecured
Class 13 Convenience
Class 14 CCB-1 Guarantees
Class 15 CCB-2 Guarantees
Class 16 PIERS
Class 17A WMB Senior Notes Claims/Class 17B WMB Subordinated Notes
Class 18 Subordinated ClaimsClass 19 REIT Series
Class 20 Preferred Equity Interests
Class 21 Dime Warrants
Class 22 Common Equity Interests
Still cannot figure out why they would have this footnote in there. I mean it could be sloppy editing on their part and its not the first time they have screwed something like this up.
This is the first that I recall them referencing this as a class 18 security if Art is successful. Seems strange that it happened at the same time as mediation occuring, which may provide a little glimpse into that world.
My two cents on reading the Debtors response fully over the weekend. Its worth what you all paid for it and probably as valuable. Like others have posted on here its a clear, well written and argued document with ample support and documentation. If all I had was the two written arguments I think at this point I lean toward them which speaks to the strenght of the written word. That said I have to remind myself that I have listened to their expert witness, Chamberlain and was underwhelmed to put it lightly. Since I did not hear Mr. Eitel's testimony and have been unable to find it online I cannot fully confirm his statements are truly a strength for them or careful editing. As a longish-term shareholder, I don't want to get chided by Mr. Grunge, this document while it made me rethink my position size has not allowed me to lose sight of what I believe to be the real topic and we are in the right. What it did however was have me reduce my position slightly as it reminds me that one never knows how a court will decide and following any decent money mgmt this position is now only 1/8 of my portfolio down from 1/5.
Regards all,
mike
I am surprised by the date of the extension to the 22nd. As you may or may not be aware the ongoing DIMEQ litigation has been ongoing during this time and the defense (debtors) response was delayed over a week past a court imposed deadline because both sides agreed to extend it due to resources being tied up in the mediation efforts. Closing arguments for DIMEQ (one hour each) are supposed to happen on the 23rd.
Do we reasonably expect that the one-hour each closing arguments will actually take place on the 23rd?
I'm trying to figure out a way to fly out to observe this and then fly back to be with my wife's family for the holidays. I wouldn't even be too upset if I got bumped on the return as I used to do when we were dating. ;)
Additionally, in case one does not check out the other boards it was announced that the mediationi has been extended for two more weeks, potentially concluding on the 22nd.
http://www.bloomberg.com/news/2011-11-07/washington-mututal-judge-extends-mediation-on-bankruptcy-exit-two-weeks.html
Personally, I can't see any hope for mediation with this large of an asset (DIMEQ) still in dispute.
Nice to link to Rodney's blog.
He is incredibly intelligent, thoughtful and an asset to many with his generous advice and willingness to teach/answer difficult questions. His blog was closed for a while and it appears that its open again. If Rodney ran investments for others I would have no problem investing 50% of my investments with his as his logic is sound.
nicely stated JT.
On a plaque at @ University of Wisconsin lies a message that we should all take to heart not only on this board but also in life.
I agree. WTF is this about being class 18 not class 12.
Anybody know what the definition of Class 18 is? I don't have the original GSA to know what that is.
Class 12 - General Unsecured Creditors
Class 16 - PIERS (WAHUQ)
Class 17 - I Thought was REIT
Class 18 - What is this?
Class 19 - ?
Class 20 - Preferred Equity
Class 21 - Common Equity
The auction was on Friday so this news was out there on Monday. Note that the final amount of $36.5M was only slightly above Gores group initial purchase announcement @ $30M that was reduced to $20M.
For a point of reference when the announcement of the initial bid by the Gores group of $30M the stock moved up to a high of $.69 in the next day. Granted it didn't stay there but someone though there was value up there.
I agree with you. It seems too unlikely.
My belief without any research is that the report was filed manually and the Deleware Courts are either closed today for the holiday or due to the weather, or the one person who knows how to use a computer is out with a sick kid and they cannot upload the file.
Looks like do let #528 gives us some idea on distribution but not amount. Motion to extend exclusivity to Dec 1 but more importantly #12- no distribution expected in 2011 due to tax issues etc.
Sorry, can't link from my phone.
As of the docket today still no other bids other the $20M bid (originally $30M). Ugh. I figured nothing but we still have a few more days.
Thanks for the response. I unterstand the one shot in te waterfall and they will owe the first 500m to senior noteholders before they see a dime ( diff between ebb contract rate And fed rate as of last note). The problem is if the deal was agreed to today there still would have to be 200m paid to wahuq before k and p get anything. Or is there an assumption that h gets paid at something like 60% and p and k get 10% which then leaves wahuq holders with nothing as the 60% of 700m is 420 and then it goes back to snh.
Even when h has to pay snh back for contract rate there is still a 200 m gap which should get paid before p and k. That said each month hurts h @30m vs 14m for k and p.
Note. I am writing from my phone and memory as I sit at a hospice care facility with a family member.
With regards to the piers isn't the hope for the investment at this point simply that the full claim amount is $700M ($34/share). Now, for any of the preferreds to get paid wahuq would have to get paid in full first. That means they wwould get $700m less the approximate $500m to get paid. That leaves $200m left / 23 share or $8/ share. Grantee each month costs wahuq 30m vs less for the others (14 m iirc).
The only way k and p get paid is wahuq gets full minus contract rqte which wouldn't wipe out wahuq for 18 more months.
Thanks for the answer. I was trying to figure it out as the deal has closed, Demant was withdrawn from udpates so I was trying to figure what would be left.
Seems like everything is wrapped up but the options repricing that the OEC objected to. I agree with their logic but at the same time I want it resolved and payout to occur hopefully before the new year but I doubt it.
Can anybody help me out with the point of #508; the motion to extend exclusivity through Oct 28, 2011.
My understanding is the deal has closed as of Sept 9 so is this just a formality or is there something else?
If so, does this give us an idea of when they think an equity distribution will occur? If not, anybody have any estimates? Thanksgiving, end of year, does this go in 2012 due to taxes?
Yes. While the change for the debtors has changed from contractual terms to the Federal rate the interest savings there should be something like $18.5M per month (change from $30M to $11.5M) and overall something like $400M in total dating back to the filing date. However, per the terms of the PIERS security they can only be paid once debtors senior to them are paid at the full amount. That is why in that waterfall analysis on the last page of the debtors filing from a few days ago didn't show much of a change for the Senior noteholders yet if you went page by page the amounts were considerably less. I haven't done the full math but basically the logic is this.
1. Pay interest to Senior noteholders at FJR rate (neg for senior noteholders, + for PIERS)
2. Before PIERS get paid, seniors have to be covered in full so go back to step 1 and pay difference between FJR and contract rate to senior notes.
Therefore while the interest goes to $11.5M monthly its still $30M. There are rumors on here that to get the deal done the SNH will not require to be paid in full so that the PIERS get paid and/or the fact that any PIERS held by the 4 HFs would be cancelled and therefore the remainders would get paid in full.
I'm not as optomistic that the HFs will do either and this will continue to drag out into the Spring damaging WAHUQ the most. The problem is the SNH are in the drivers seat and will not give up their piers holdings or lose the contract interest to help retail and they know that each month damages WAHUQ the most therefore WAHUQ is the most likely to capitulate.
I agree on the Indenture Trustees state of mind. That doesn't help.
While I would like to believe that. I think she is simply right here in stating that if we are debt - we are class 12 and if we are not, we are equity and we'll get a portion of the OEC.
Hearing on 10/6/2011.
Judge basically sending groups to mediation for thirty days with an update on 11/7/2011.
Steinberg and Dime Holders are not invited to mediation.
Steinberg asked is she meant to leave DIMEQ holders out. She disagreed and said that basically DIMEQ will knows its fate based on the resolution.
Can't disagree with that.
Any chance this could be stickied or put somewhere which is easily accessible?
Thanks. I'm going to have to read it again tonight with a bottle of wine.
Linda-
Can you explain the charts on pages 10-11 (point 14) as compared to the chart on page 12?
Yep.
I wanted to read it with my own eyes. Without this equity holders would have had to file that they are a shareholder to be eligible for distribution which as you know is usually not needed.
This confusion dating back to this summer makes the claims on file a mess as many did. Similar to the list of claims in AICPQ but here they were going to require it filed by the end of September.
I just was in PACER and printed it out.
Thanks again.