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I would be hoping a Wynnefield purchase outright would=current management clowns are gone and Wynnefield puts someone in who is actually capable in the CEO position to manage an actual company! Even in BK for Delaware companies the shareholders retain rights to bring votes on subjects presented and brought for a vote even during the chapter 11 process. I read something awhile back when this all started regarding precedent case wise on this matter that was recent.
So can we hope for a hostile takeover maybe?LOL Who knows. But either way, the best way is for them to get rid of these arrogant managers who have run this company into the ground and passed on the baton to people who are just going to continue to do that same. I mean really, how on earth can they justify promoting someone to CEO who was part of the disaster all along for many years? I had hope in him until he just put some cash in his pocket and moved forward to BK. Tough job hun over the past three months decision making wise? What a strategy as a new CEO. Ridiculous and he should have NEVER gotten that job. They really need some new blood whatever happens.
Yank and Rob, I am looking strategically at 290m in cash and keeping the 1st notes in place plus whatever is needed as a fair offer for them to buy the rest of the shares out to make it work to get 100%. I am also thinking that if they did have the financing they could even get much better terms on the entire debt and refinance it while maybe paying it down some to reduce the leverage. Look at it this way simply 10% per annum on 250m is the same as 5% annum on 500m. Even if they had the same debt, if they can drastically reduce the interest rate due to their credit agreements and connections or even have the company pay the loan directly to them, then I think the numbers would work very well in reducing the interest expense and make Rotech close to if not solvent at this point. Hopefully I am right and they are thinking the same thing. The ROI on a CAPAM analysis of this situation with different financing scenarios even with the standing debt in a company restructure would, IMHO, work out well even at a higher price point then the current debt outstanding. ROI might take a few years, however that is ok and that is what these guys do (Wynnefield, Highland, etc.) in troubled asset purchases, look at longer term ROI. JMHO, but in the end I think there is also the possibility as you stated it goes through as stated.
Silverpoint is also involved in this, so that does concern me because as we have seen with Hostess, they are more of a strategy of post BK troubled asset investment and financing which they have also done here with the DIP. But, I am guessing that we have two groups here and one does not know for sure what the other is going to do insider wise. That is what I am banking on. That is my hope and anticipating that at some point soon here Wynnefield may make some kind of strategic move in some way.
It just makes me angry in a BK that politics and company industry and service population comes into play. It is really unfair in many ways to stock holders to have different treatment like this because of the situation. That is not the law, that is something else entirely. But then again, we live in a world now where this is common. Just look at the GM bk and the bondholders in that one. Good example of why we now live in the BK twilight zone where anything could happen depending on who is involved and how much power and influence they have. Overall it is really why at this point, penny stocks really are like investing in Vegas!LOL
"We are dealing with a business that provides a life support service for many of its customers, these are insured clients by a third party (legally liable), and the Manufacture Vendor contracts are a must have for this business to emerge from BK.
"payment in full" "
I really do not care about emergence from BK as a stock holder having to do with manufacturers being paid in full Rob. I just care about my investment. Period. That is irrelevant and not our problem! It is about the law and however much the manufacturers may be angry, and be unwilling to give credit in the future(thats what the DIP financing is for and why they are worried they would not be able function with out it and have stated it) whatever they have out there as vendors IMHO based on my understanding of BK would come in last place as end of the rope unsecured creditors.
Ultimately that is not our problem as stock holders if the manufacturers are upset about getting stiffed and do not give them credit after the discharge Rob. They know the risks when they extend that credit. Thats life and that is why companies do not and should not be going around claiming BK without a lot of thought in an industry where they depend on a handful of manufacturers to supply their product. JMHO, but you act like it is the trustees job to make them emerge. It is not. If they are not able to make it then many chapter 11s Rob over the years have been converted to Chapter 7s. It does happen and it is life and is not the job of the trustee to protect a company from this happening if the numbers just do not work.
And either way you look at this, there are way to many factors IMHO that are in play here and to many powers that be involved to make it as simple as you have stated in your posts to the negative. I just guess we will see here soon like I said who is right and who is wrong. If it goes through just as planned and we get .10 cents, then I think I would basically say I was wrong. But, I really believe that I am not wrong.
Also, I think you are trying VERY hard to imply this is a done deal. Atleast I understand you could be right or I could. You just pretty much see only one way in your posts which is really when I get concerned when ANY poster on any stock is so sure of themselves and keeps stating things as such. Especially to the negative because the question is, what is the use in bashing a stock? WE all know the answer to that question if you have been around the block in the penny stock land.
Just ask JT how he is being stocked now by someone who he must have stood up to manipulation wise and blocked their strategy or function. Honestly JT, I am guessing you did something blocking that person on some board on some stock in the past from manipulating like they wanted thus they lost a lot of money on shorting or pumping and they are now following you around trying to take revenge. That is why you really in the end need to take what people say on these boards over all with a grain of salt. Do your own DD and make your own decisions. I will ride this one into the ground myself, especially and most importantly with the estimated float, because in the end I am going off of that and the insider purchases. Tell me another stock where insiders have purchased a bunch of shares on a filing of BK? If it has happened, which there might be a strange duck out there where it did and ended up badly, I would like to see the scenario. The closest scenario I can find to this, in this industry, is American Home Patient and Highland who once the threats of BK started, they were buying also. And if you have done any research on that situation, you know it ended up with them buying the company and accumulating most of the stock prior to the purchase and tender offer. Either way, at least I understand I could be wrong Rob. Are you so sure of yourself Rob stating all this negative stuff that you do not even admit that you could be wrong also? That should concern anyone who is just trying to have a logical conversation about the stock.
Here we go as I said in the last post Yank...Rotech is the least of the problems here. That 63% percent is the key to see how many of the low bids came out of the 63% and when Congress looks at those low bids, who made them, and what their structure was in order to be able to provide the services at that cost and also break even or better IMHO to see how viable and legitimate the bids really are:
"CMS awarded 90% of contracts to suppliers that are already established in the competitive bidding area, the product category or both. Small suppliers, those with gross revenues of $3.5 million or less as defined by the program, make up 63% of the contract suppliers."
link http://www.hmenews.com/article/cms-names-contract-suppliers-round-2
Well Yank, here is another scenario, maybe Rotech already knew before filing with those auditors involved that this would be dismissed or of some other scenario. However, what a smoke screen! If it is dismissed it would then look bad in some ways for the company but it also would keep the current share holders in tact and they would have to negotiate an out of court reorg with the current stock holders and the 2nd tier bond holders coming to some kind of agreement or we see liquidation. I am guessing things would end up much better in the end for the stock holders then .10 cents to keep the thing afloat.
And as far as the non assignment, I totally agree with your asessment. These are also the reasons why companies reverse merge, among other reasons also as far as going public from private etc., into companies that hold contracts to keep those contracts in place. These are good things for share holders because it protects them from having a company just gut itself and transfer contracts along under an APA agreement, for example, and steal an entire business structure out from under the stockholders nose. I am guessing there are enough contracts here at stake that they can not afford to dump them as I said in the other post. But I do believe, as you stated, that in chap 11 they would be able to continue with those contracts. But hey, could be wrong. Especially if there was some thing clause wise in the contract in relation to chap 11 saying that the contracts become null and void. I guess that is possible.
As far as the financial stability of companies bidding on round 1 and 2 contracts, my personal opinion based on understanding some of the companies that bid, is that Rotech is the least of the .govs problems stability wise when it comes to these bids. I think there were even companies that were tiny and new that were not vetted giving suicide bids. Is this going to be reviewed and then those bids and companies thrown out? How about a rebid? How about a congress so angry in the mismanagement of the process that they ram down dmercs throat the market pricing model by passing it based on the anger at their negligence and maybe even manipulation of the process to make it seem like they were savig money? As you said Yank, time to bring on jerry springer! Or, maybe we need a little carnac the magnificent?=-)
LOL, Rob if anything IF YOU ARE RIGHT, that is actually GOOD NEWS IMHO for the SP! That means they will have to figure something else out here other then the BK then because THERE IS NO WAY THEY ARE GOING TO LET THOSE CONTRACTS GO BECAUSE THE DEBT HOLDERS WOULD HAVE SEEN THIS AND REALIZED THEY WOULD SHORTLY BE FILING FOR FULL LIQUDATION!
I am not sure if you are aware of this Rob, but a substantial amount of that 500m in revenues Rotech has is VA contracts even prior to the new 68m one in Minnesota. They are the top VA contractor for DME in the country I believe. So based on what you just said, which I am not sure is the case anyway since in chapter 11 the company still stands under reorg so very possibly would retain the contract(however, I am not a lawyer so am not sure on this), Rotech WOULD HAVE TO FIGURE A WAY TO DISMISS THE CHAPTER 11 OR SELL OUT! If they lose those contracts Rob, IMHO, they are done because it will destroy their revenues because it is such a huge piece. That being said Rob, IMHO, I highly doubt they are going to give up those contracts whatever the situation. Period. That is my opinion for what it is worth and I just do not believe it would logically be in their game plan to do so.
Could be wrong and I have been before, but it would not make sense for the creditors to take equity in a company who is going to lose enough contracts to litterally destroy the revenues of the company. And honestly, I do not really care what anyone thinks on here. All I do is look at what is happening and make my decisions with my money. It is up to the rest of you to do the same because in the end, this could go down in flames or be a big winner. Which all I have is just educated hunches on which way it will go for my own investing purposes. I guess we will see in the end, as I have said before, who is right.
Rob, do you have proof that Wynnefield holds the debt? You imply that in your post? I have yet to see any proof that Wynnefield holds any of the debt or even a small amount other then hear say on this board. So please, if you have proof of this in a filing or some other place, please can you post that for us? Otherwise saying they are taking a large position because they hold all the secondary debt or any debt for that matter Rob is just not absolute at all unless you can post some proof.
Thus, it is very possible they are accumulating for other more posative reasons SP wise like protecting their larger investment they paid more for by buying more cheap shares so they have more power in negotiations. Or, it could be on its way to a tender offer like with Highland. Without that proof, everytime someone says Wynnefield is accumulating to get the shares cancelled because they hold the debt just does not have alot of legitimate public information to back it up. As far as we know, they may hold none of the debt.
And here is another thing Rob, in the Highland and American Home Patient deal, Highland did hold all the primary debt and it still turned out well for investors! So either way, I believe without that proof there is little leggs to stand on IMHO that they are accumulating for negative reasons. Without their debt holding scenario, which is still not absolute even if they did hold the debt, the prices they are buying at just do not make sense in any way shape or form unless they actually plan on doing some type of posative deal to make those shares worth more then .10 cents. And my guess is, they would not even bother unless it was going to be a significant amount more then they are paying for the shares at this point. My hunch, for what it is worth which is probibly not much? Even an estimated 10% share in the new business, if that is the way it goes, puts us in the green down the road with Rotech with the reduced debt as Yank said. I think that is a solid potential scenario. Especially in a Chapt 11 and not a 7.
But, as we move along in this process, I guess we will see how things pan out. I think in the end it may help that we actually have a trustee involved because it could help with having a more unbiased allocation. If vendors are getting paid also to keep them happy, Wynnefield may also fight for that money to be able to pay off shares also. I am sure whatever the case is Wynnefield has done a very thorough analysis of the situation and are acting based on numbers and what they think they can accomplish. The key then is really what their motivation or plan is. Which at this point, we really do not know.
That estimate Yank had ALL of the other insider holders in there also figured into that amount...going back, not just Wynnefield, Landas, and Obus. My guess is we are closing in on 90-95% locked. Just Wynnefield affiliated I believe based on the filing today equates to the 58.5% though of total shares out still leaving 30-40% still in the hands of the other insiders. That is their most recent tabulation so I am assuming it is accurate.
Filing Again By Wynnefield?
http://www.sec.gov/Archives/edgar/data/899083/000114420413021094/v340833_sc13ga.htm
Unless my count is wrong, they are at 58.5% consolidated? Unless they are overlapping on the holdings from the funds and the personal holdings for landas and obus? Definately to me at least looks like they have some sort of plan here. Either way, the share price does not lie at this point and the volume today does not either.
Well Big Yank, you and I seem to not agree on a ton sometimes. But I think scenario wise you nailed this on as a strong posibility. I could not agree with you more and have been thinking this for a long time. I have always thought a debt for equity swap was always a great idea for Rotech. However, just never saw them just shutting the door totally on the current stock holders and maybe giving us 25-50% of ownership to reduce debt. We have to remember also the question: does Wynnefield have access to 290m to just get rid of the secondary holders? Well, of course they do!
Another direction, which we have already stated, at the very least Wynnefield will petition for a larger payout to get the shares cancelled and are leveraging down their average price. OR, they are planning to make a tender offer like Highland did.
Bottom line here Yank, IMHO, the shares and the way they are acting and their pricing speaks for itself that there is more behind this. ESPECIALLY TODAYS TRADING AT 1.2 MILLION AND A .2 SP ON A STOCK THAT IS GOING BK and supposed to be worth .1. And, of course, with Wynnefield buying more and more. Never any guarantees but we might make out ok here in the end if we are lucky. I know you dont hold shares as you stated, but you can not deny the way the sp is acting and the filings either.
Hey, I am on board with Team JT next week! Every time Wynnefield affiliated filings are made of buys, I feel even stronger about something good this way comes. And thats a fact Jack!=-)
Hey JT, more of that pesky DD.=-) In relation to Wynnefield holding all the secondary debt, I just found out reading through Highlands info on the purchase of American Home Patient that they HELD 100% OF THE PRIMARY NOTE THAT WAS IN DEFAULT! So, IMHO, this pretty much says that even if Wynnefield does hold all the secondary notes, it does not suggest that there is any certanty they would try to block a vote to stop the chapter 11 because of holding that debt. To the contrary based on the Highland deal, it actually shows IMHO even more of a chance of how this scenario seems to be similar to Rotech. Here is the quote and link:
"The company has been struggling to refinance a $226 million promissory note that came due last August, which is owed to NexBank SSB, an affiliate of Highland Capital Management. American HomePatient has been operating under a series of forbearance agreements, but says that if the proposed deal with Highland falls through, it could be forced to file Chapter 11 bankruptcy."
http://www.bizjournals.com/dallas/stories/2010/04/26/daily33.html
Just Counted Wynnefield shares. As of last filing including Landas and Obus they hold 39.2 percent of the company stock. If this does not say something is up then I do not know what does. However, Yank could be right if in fact they hold most of the secondary debt. But I have yet to see proof of that and 39.2 is still not enough to totally block a vote to oppose them unless they somehow have control of more shares then this.
IMHO, for what it is worth which is probibly not much(lol), it looks more like they are attempting to get control for a buyout. But as I have said before, could be totally wrong and it could also to be to block others from contesting the chapter 11 as Yank said. I am addmitting I can see that scenario as viable also just do not have enough information on who holds the bonds at this point to make a determination how viable that is.
If someone has a link showing Wynnefield holding the majority of the secondary debt I would like to see it. Otherwise it is just speculation that the debt was purchased by them without solid proof. Here is the link for Wynnefields holdings.
http://www.sec.gov/Archives/edgar/data/879796/000114420413018009/v339650_sc13d.htm
Bottom line, its a growth industry for many years in the future with the baby boomers. I do not think any of us can argue that. Just an issue of what it will look like here in a year or two IMHO. Lots of changes. Still hoping ROHI gets picked up by someone prior to the BK. But, it honestly could go either way I suppose. Still think the insider actions are important. Can not see any reasoning with such a low float of them buying more at a 30%-40% premium to the stated settlement price. I still think they will force something different from what it looked like in the 8k. But, I guess we will see since the window is here to 4-15 unless they get an extension on the forbearance. The way I am understanding it also is that the primaries are still in tact and not in default. Therefor, could still have something happen with an outside force or insider holding stock to elliminate the secondary notes for equity. I guess the bottom line IMHO is, is Rotech with the primary notes still in place worth more then 292.65m? Good question, I still think it is and maybe someone else will also out there.
As far as SGnA, you are on track there Yank. Rotech really has a problem with that, to some extent because of the debt, but to another extent because of the upper management feeling like they are at a different level then they actually are running a 500m a year company with 4k employees. And we still have the issue of where was the warnings of BK? They referred to one statement at some point in the past but I think they are behind the eight ball in a class action with the big investors because there was not sufficient warning of BK as a potential IMHO. But then again, could be wrong I suppose. Either way, should be a fun ride. Hopefully it will end up on the up side of things for JT and I here and any other retails still in the low float.
One more thing I was thinking about also today was the fact that what about all those lower level executives at maybe a regional level or VP who hold stock also? Those are not figured into the float estimates because they do not have to report. Wonder how many of those shares are out there further reducing float. What are your guys thoughts on that as an estimate?
LOL, good luck with the stockers JT. When Yank was talking about games, I see a ton of that. And the closer to something big happening in a stock the worse it seems to get.
I really have no games and never have. Pretty straight forward, am long on this stock and hope this all works out. Should have maybe gotten out back a couple years ago when we had a couple profitable quarters but just took some profits and left a good chunk of it in. So that is where I am at on ROHI.
As far as Gentiva and Arcadia Resources Yank yes I am familiar with them. To bad about Arcadia though and them closing their doors. That was unfortunate that it went down in flames like that. Lots of people I am sure lost lots of money on that one. I know some about Gentiva but have never invested in it and have not done a lot of DD. I am guessing you brought KADR up because you see what could happen here maybe in an out of court restructure Yank? I see your point and you have a good point. However, the big difference with KADR was that there was massive float and insiders had mostly bailed. This one we have them holding tight and buying more so I see this as more like maybe a Highland situation IMHO. But then again, in the end, I could be wrong and it could be like either of those I suppose. Just can see alot of insiders, especially Steel partners, losing mega bucks since they are in this puppy with an average pps of 20+ bucks a share. Thats some major coin to lose. I am guessing they will specifically fight this in some way just because of the math and how much they will lose if this goes through BK and they get .10 cents a share. Does that make sense to you guys?
"Hey, I go to Vegas, too, so I am not averse to a gamble, but the website is "Investor's Hub", not "Gambler's Hub" and I don't buy the concept that everyone here is a penny flipper."
Was it not you that told me all there is here are penny flippers and I should go and check out Yahoo for a real discussion? Now I am really confused again because you say one thing then say the exact opposite thing later. I am leaving, then you stay. This is all penny flippers here at IHUB, now they are not? These types of patterns match a particular type of investor IMHO.
As far as this situation, I have been in this stock and others in the HME industry for many many years. This industry is the bulk of my portfolio. So yes, I have poured over many years of filings for this and spent litterally 100s of hours researching this company as well as others in the industry. So no, I am not a flipper. And, regardless of the filing, it does not change the actions of the indsiders here with their shares. Plus, did you read the post I made a few days ago about the Highland deal on AHOM? You should go read up on that because although not exactly the same situation Big Yank you can see some similarities with the way the insiders are acting here and how it played out. And they were also in default on their loans at the time and IMHO even in more dire shape the ROHI is here. Just saying there is a pretty solid similar example of what is going on here and the actions of the shareholders. Difference is there was alot more float in AHOM. Here, no so much. Which makes me believe as JT does that if in fact they figure out a way out of this, it could be even bigger then AHOM. Guess only time will tell who is right and who is wrong.
Sorry Big Yank, but even though I do believe in many options here I do believe you took the most dismal which is just one of many and tried to "pump" it. Why, not sure, but there are many options good and bad. But, considering the PR said .10 on the shares I would say there is a very good chance that is going to be the worst case scenario. And I tend to agree with JT that with insiders buying and the float shrinking even more to record low levels for this company, I would think that they are planning something that Rotech may not even be aware of yet as share holders. JMHO, but you know what they say and JT would agree with this also, actions speak louder then words.
And insiders buying and holding tends to make me think they have something up their sleeve that is good for all stockholders since they are stockholders. Could be right and could be wrong but I am curious why you took the worst case scenario on a "position paper" standpoint and painted it that way? I am sorry Big Yank, but you confuse me with your posts. Are you flipping this? One minute you talk about all the players in the industry and how there is potential there and the next you are talking about the absolute worst case scenario of doom and gloom. Just trying to understand why you are flipping back and fourth when there is no reason for changing your direction based on changes in events. Your scenario at this point has no better chance then many others yet you spent much time on discussing it. Just trying to understand why the flipping back and fourth from positive to negative. And, trying to also understand why you say you are done posting here, why you would say that, and then you come back and keep posting? Do not really understand this also. I mean hey, it is a public board, but that is really strange also.
Gotcha on Nelson and Joshuas stock. Yes, with them being the buyer that looks like something may be coming. Otherwise, why would they buy more? Steel Partners overall could be looking at this as an opportunity after their huge losses on this stock to just get control of the company and try to make some of it up that way. In the end, who knows what will happen.
I think you may have added an additional number in there Gold. I dont think there has been enough volume to get that much regardless. They own about 3m shares I believe combined with direct and indirect as of the last filing. Either way, yes IMHO wierd they have been buying in this situation at higher prices then what is stated in the plan of bk. Must have some reason for doing it.
JT,
Thanks for the info on VERT. Was not aware of their background and will keep that in mind.
Also, this company is not a typical otc with 500m in revenues. So, I still think you were on target when you were saying they are a very large company even though they do not have 30k employees.
So, if there is a big pr without a specific price point like a tender offer but the news was big, and in fact the float is only like 2m, I can not fathom how high this would go with so few shares. Like you said, should be interesting the next week or two. Did you see the forebearance on the 23.5m loan expires 4-15 in the pr? That gives us a max time line for some sort of news or happening as a window also.
Finally, I totally agree with you that that 400k today looked like blatant manipulation to suck others in. If that 2m float is accurate JT, then that would have been about 20% of everything left in a couple minutes with no additional news or massive price drop? I highly doubt it. I think it was an insider wash sale of some sort IMHO to manipulate. Any further thoughts on that? Hey, like I said earlier, I think it is the end of the line with the float for accumulation at this price level. Tomorrow should be interesting to watch what happens.
Big Yank, could not agree more. Dont forget Pacific Pulmonary, AHOM(Highland), WAG has DME still, multiple capital management companies like Blackstone, Wynnfield, Steel Partners, etc. Seriously, now that Rotech has showed they are not going anywhere they could force some hands and start a bidding war auction. Maybe that was the reasoning all along. Even Linde when they bought Lincare recently admitted there was competition from a couple other companies causing them to raise their bid. Just can not see the company equity going for 290m. I really do believe it is worth a lot more then that even with the primary notes are going to stay in place after the regorg. Hope we are on the right track, but it really does seem logical.
My Thoughts On This Post
http://finance.yahoo.com/mbview/threadview/?&bn=0c9b5256-5268-3cb4-8575-538888661f28&tid=1364228223455-19cc1d0f-9a18-4d25-9d46-60c3e7e4cd01&tls=la%2Cd%2C0%2C3#mbt=Scam%2520Alert%2521&mbl=%2Fmbview%2Fthreadview%2F%253F%2526bn%253D0c9b5256-5268-3cb4-8575-538888661f28%2526tid%253D1364228223455-19cc1d0f-9a18-4d25-9d46-60c3e7e4cd01&mbtc=mb-tab-topic
1. Hold your shares=Do not compete on the bid with us
2. No mention of our posts about the float left and the total insider holdings=probibly pretty close accuracy wise
3. Rotech does indeed have 3800 employees but really how is that a huge deal in the whole scheme of things as an error? It is not.
And JT, just so you know, that long list of level 2 has been there for a very very long time day in and day out. Obviously you would not know that, which makes sense, if you were not watching it every day for years. Unfortunately, unless I am wrong, there is no way to retroactively go back and look at who was on bid and ask for a particular day archived somewhere.
Highland Cap Outline Of Purchase of AHOM
Good example as we can get in relation to this. However, float was much higher outside of insiders thus big insiders are going to demand a much bigger payoff to give up their shares. They could be shooting for 90% though with the insiders to sell it all over to Wynnfield. Look though at the pricing on the stock. .1 to .2 prior to the tender offer of .67. I think because of the circumstances this is a much bigger company with a new contract and less float and Wynnfield does not have close to 48% like Highland did of the common shares. If this indeed follows a similar path it should be interesting where we end up though. Notice though the "out of court" restructuring. I believe this is coming here in some way whatever happens. But of course, could be wrong. Just remember, as of the day of the PR, there was not offical BK filed only a plan. Plans can change.
http://www.valueuncovered.com/ahom-complicated-going-private-transaction
Thanks for the response JT. Three points I want to make in response:
1. Gotta love the "proposed filing of BK" instead of a PR ANNOUNCING THE FILING. We all have to read between the lines and realize at the moment of the filing at least, and more then likely right now, THERE WAS/IS NO BK!LOL So many people miss the subtleties. Easy to have something else happen in the mean time which makes them seem like they are tacking in a different direction prior to actually filing due to an event of some sort.
2. Simple answer to the multiple MMs. Wynnfield could be using multiple MMs to buy the stock to make it look like there are more then just 1 person buying on the bid. Unfortunately the end result of form 4s is just showing the bulk of what was bought, not how it was bought and through what MMs.
3. Bid wacking is a rather logical concept here and I agree. However, it all depends on their time line and truely how much float is left. Seen alot of bid wacking in my life through the sales circle to entice more to jump in while it is artificially going down. That very well could happen in the next day or two at this price level JT IMHO as you said before until they zero out the net and have to take the price up to accumulate more.
Anyway, so based on the addition of the S4s and looking at the insider holdings what is everyones feelings on how accurate we are on the float? Another point is, that Filthy guy from Yahoo is obviously watching our board based on his quote. He has been negative on ROHI since he showed up over there. Maybe he is working for Wynnfield or someone else? Who knows, but you have to wonder with him calling just our basic logical conversations here a scam of some sort. We are the ones saying we could be wrong. He seems to know everything for sure about how it is going to crash and burn. And him calling this discussion a scam lends to a motive of being worried that it may attract more retail as competition especially looking at the float locked up by the insiders that is growing larger every day it seems.
I think we can all agree here in the end, we ramp up or down based on logic and information. At this point, I am saying maybe 70% chance something more is going on here. 30% chance it goes down in flames and we end up with .1 a share in BK. Just my humble opinion for what it is worth. But then again, I am willing to honestly risk zero in the chance it could end up being big. Especially since there is very little float left. The scenario you said JT, I am guessing there was not almost 90% locked up by insiders? That is a big difference. They are not in it to flip and going to sell like the other stock you mentioned IMHO. That is a big difference where in the end it may skyrocket without much selling as you stated earlier so they can buy it all or close to it if that is their goal.
Based on the PR they still have some time to try to pry those shares on the float. But as you can see the volumes starting to go down substantially at this price point, if they want it they are going to have to push the price up. To gather those shares off the float it will take the price up causing a much larger PPS tender to look like it makes sense from whoever is going to offer it if in fact we are right here. Either way, considering the PR, have you ever seen a company this locked up like this float wise with a BK PR with all insiders either holding or buying more? Like I said, looks like this is a line up of the crew for some kind of payday. But then again, could be a head fake also depending on who all owns the debt and has a stake in that. So, who knows. But I am just trying to be logical here and based on logic, float is locked with no insiders selling and even buying on news of BK. Very strange if you ask me and tends to lean towards something else. Funny thing is, look at all that float they gathered after the filing! Some people just do not look any deeper. Is it worth losing the .15 to .1 based on the risk and reward if we are right at this point? I think so since we are talking big big money with such a low float if they change direction here in a big way away from the BK or renegotiate it outside of the courts. Should get highly interesting here soon. This may be one of those ones people will be talking about for many years or forget about. I am guessing the former though just based on the players, their specific actions, and of course the float left.
Guys, do not quote me on this because I am not sure how accurate it is, but this is a good estimate of the float left. There is just got to be something up if this is accurate.
http://www.j3sg.com/Reports/Stock-Insider/xxxgen.php?tickerLookUp=ROHI&sortBy=date_D&descending=1
Here is the deal, if you add the direct insider shares and the indirect shares(read up on this if you dont understand the difference as fam members, etc.) you will see that we have a total of about 85-90% of the entire outstanding shares! Like I said, not sure how accurate it is, but if it is it paints a picture. Especially understanding looking at how much Steel Partners still owns. This is important if that is accurate also considering they bought most of those shares post BK in the 20-30 dollar range when they re-ipod many years ago. So, we are seriously talking about them losing at this point a couple hundred million? They, IMHO, would be VERY MUCH a potential spoiler here colluding with Wynfield also. Not sure, but it does make some sense. That being said, looking at the current buys from Wynnfield, if these numbers are right guys, we are down to a float of roughly around 2m shares or 10%-15% of the entire stock out. So the question is, why so heavy insider owned and not dumped? They would have run for the hills after the PR if there was not something more here. Looks like there is a lining up for some kind of big payoff in the end common stock wise IMHO. Guess we will see. Like I said, could be other motives also though and I could be wrong.
IMHO, only one explaination for insider buys at more....they know or anticipate something going in a different direction that will make THIS STOCK stick and be worth more then the .10 cents. Even if the BK goes through, THERE IS NEGOTIATION OF THE EQUITY HOLDERS. So, IMHO, worst case scenario is they would negotiate a much higher payout then the .10 cents. Best case scenario is they do an out of court reorg where we as stock holders vote and get some of the new equity with diluted shares OR Wynnfield is colluding with someone else to make a tender offer realizing the company is worth much more then the 290m that will be converted to 100% equity. See, here is the deal, if they decide with another holder of stock that they are going to make a tender offer and the company is not aware of it and because of this they start accumulating float, then this is not insider trading at all. That is their right as a business entity acting in their best interest to do so as long as the company does not know about it. JMHO, but I think that could be a strong possability also. We will see. I have no doubt I could be totally wrong. But either way, understand whatever happens at this point your risk is lower at these prices because you are guaranteed only the loss down to 10 cents as a floor.
Well, you are right about the BK unless they already knew there would never be a BK! And remember JT, if someone buys it more then likely they are out of control anyway so what is the difference? One more thing, if someone does buy this I am suprised honestly it did not happen a long time ago. Pay off the 290m decrease interest expense by massive amounts and keep the primary note holders. Then maybe a good fair deal for the stock holders. Just has never happened, and I really never understood why. Maybe because they had a plan all along.
Here is my timeline plan out for this thing:
-They propose BK with bad terms for Stock holders.
-Winnfield reacts by buying every share it can and after a period of time makes a tender offer for the rest.
-Winnfield states after the PR was released they made a business decision to purchase the company to protect their investment with the crappy BK terms and are strategically thinking it had a ton of potential. This is how they legally justify their actions.
-Possibly even a bidding war starts on the purchase with multiple players coming in to play ball.
-And finally, what is the smoking gun that there is more then likely no BK on the horizon for Rotech? Well, its the lack of insiders selling. And just remember, it is not illegal to hold insider stock when you know something good is coming. It is just illegal to buy more when you know something good is coming or sell when you know something bad is coming. Get where I may be going with this? Their take on the scenario is, they all DID NOT not know what was going to happen, all others held strategically and would defend that and Winnfield bought because they were going to attempt a buyout of company? Maybe very good sellable BS.
Rotech sells and is taken private just like all the other DMEs out there in the country. Now you have a DME industry with zero large companies that are publically owned. There has to be some reason for this. Maybe so they can lose money and get government subsidies like the farmers?LOL No idea, but it is an obvious trend.
Maybe I am right, maybe I am wrong. But considering everything else in the industry being bought up and taken private, I would think this is a good posability. And, the good part is, we win in the end if it does end up happening. Also JT, long or short term on a stock in the end we all want the same thing....to make money so we can honor God with it in some other way.=_) Well, atleast maybe you and I on the last part of that. Hope I am right. Could be wrong, but really hope I am.
Just like Highland Capital did with American Home Patient buying them out of a potential BK, I think Wynfield may be showing their hand here that they are going to make some kind of tender offer. That may be why they are accumulating. Otherwise, why in the world would they? Buy a bunch of stock that is going to be worth .1 for .13 and .14? That does not make sense as an insider to do that. Guess we will see soon if they are going to make an offer. Another thing is the fact that, talking about form 4s, where the heck is the massive dump by all the insiders and all the form 4 selling? NADA, just Wynfield buying? I am guessing pretty much all those shares over the past few days were, exactly as planned I am sure, panic retail lowering the float even more.
If I remember correctly, AHOM was trading at about .1 when the offer went through. I think it was for .5 to .6 a share. Never invested in it, so dont quote me on that. But rotech is a much bigger company, and with a new contract. So, who knows. But any logical person can see that giving the company equity to the 2nd lean holders is just not fair. Especially since the large stake holders and us are technically "the owners" of the company. The BOD and execs in this deal are treating us like it is the other way around. And I am sure some of these heavy hitters are not liking to be pushed around this way. At least we can hope. Did they default on purpose? That may be a good question to ask. Especially since with the short term loan they got a couple months ago they should have had enough to make their debt payments.
In the end, this should be a really interesting one. Either way, this is headed private IMHO. Just a matter of if they are going to screw all the stock holders or not and that coming to pass will depend on the big guy stock holders here standing up or not. However, here is a tell IMHO...if they were going to lay down and take this, then I am guessing you would have form 4s up the ying yang in sells...an no buys for sure! I am guessing they already had their lawyers on the phone working on this. Rotech has a bright enough future post reorg that I can not see them taking this lightly.
First of all, wow that was alot to take in!LOL However, just understand I am old enough and wise enough to understand I could be wrong. Very possible. In many ways, you and I just have different strategies. You are more of a day trader and I am more of a long term investor. Different approaches in many ways and depending on very different things on how you invest.
As far as the quote I gave about the VA contract JT, that is actually in the BK 8k directly from the SEC website not an article. Go look it up yourself. I am guessing since it is in there it would qualify as their PR of the happening.
And finally, I am not trying to be rude but I am just trying to keep the facts straight. That is it. There is speculation also going on here but an 8k offical filing of the new VA contract is not speculation, it is a documented fact that is exists already even though they did sort of bury it in the BK filing and try to down play it as such. Anyway, who knows who is right or wrong. But, I do believe if that BK goes through as stated that will be a major screwing of all investors with common stock. Hopefully we do agree on that one fact.
One more thing JT, look at it this way....what if rotech was a company with 230m in debt and 575m in revenues and profitable? What would be a good market cap if this was the case? You see, this is the bottom line JT, it is about money either going to pay debt down or going to stock holders. If the debt is gone JT, the interest disappears and the bottom profit line grows. That is the difference. If the above scenario was true, how much would rotech's stock be worth? $10 a share maybe if they were able to clear a profit of 26m after removing the debt? How about a book value of 10x(industry norm) EPS? .50 cents would be $5 a share $1 would be $10 a share. You see, there is no difference here JT. The company is worth at least 600m IMHO, but it is just a matter of more of the money in a purchase going to the debt then the stock holders. However, there is still plenty to go to the stock holders even in this scenario based on the current SP.
So what is the bottom line here? A buyout mathmatically makes sense. Especially if they are looking at getting the company for .5 to $1 a share. That would be a very good deal IMHO and I am guessing many potential buyers prior to this BK notice did not think they would even consider a buyout offer in that range.
Oh, and BTW, here is the quote out of the PR about the VA contract.
"The Company was also recently was awarded a new five year $68.3 million contract from the U.S. Department of Veteran Affairs to provide home oxygen and respiratory services to medical centers in eight cities."
JT, to get rid of the stockholders and buy the whole company potential buyers now know that anything over .1 will do it. You do not realize what a message this BK and the .1 sent to potential buyers. With this new contract that would put revenues at roughtly 575m and if the audits are not as bad this year then Rotech would have a strong chance of making a profit IMHO. You realize that the 290m that will be converted into 100% equity is highway robbery right? With the new contract even with the debt IMHO, this company is atleast worth 600m which would be roughly $3 a share.
Let me do the math....someone buys 5m shares on this massive dip on the open market. That leaves 20m left with insiders and stragglers in retail. 20mx$3 a share=60m in cash to stockholders and if they pay off the 290m note to duplicate what they are proposing in the BK you end up with a duplicate of the BK proposal with 230m left in LTD with revenues of 575m and a solid profit margin with reducing the interest expense. This would cost another company who bought it roughly 350m in cash. Do I honestly think this company is worth 580m? Yes, I do. Especially since when IHS bought it back about 10 years ago they paid 800m or something like that. Considering the industry now and factoring it in and the reduced revenues, I still believe this would be a very good deal at 580m. Prior to this I am guessing they maybe had some offers along the way in the $1-3 range but refused. This BK filing is like turning on the cattle call IMHO signaling the companies who were waiting on the side lines that they can now get a real good deal on this.
Also, Rotech is valuable based on the CBA structure of competitive bidding because they are more rurally based locations compared to Apria and Lincare. Those are the ones where if they win in those markets, they will still be paid the regular reimbursement rate.
Anyway, I know you have a lot of investing experience it sounds like. However, it just can not trump many years and 100s of hours of DD on this company. The debt is not the problem here JT, it is the interest on the debt. Remove that and the company is actually running rather lean. That is why EBITDA is decent but they keep losing money.
Either way, we will see if I am right. But at this point, the volumes and fact that the SP is not at .09 or .1 tends to make me think there is more going on here.
One last thing JT, is states it pretty clearly in the PR about the BK about the VA contract and the amount. There is no need for this PR to be re-released. Anyone with just basic knowledge of doing DD on a company already knows that contract exists after reading that PR.
What can stop a proposed BK dead in its tracks? How about a buyout offer...of course one they knew nothing about when they PRd the bk. And of course the company who makes the offer just happened to decide to make an offer the first trading day after the BK pr and bought up a whole crapload of stock for almost nothing. What luck though, because the scenario just happens to make for more money to go around for all those big wigs who are holding the big chunks of stock and wont put up with ten cents a share.
Nothing for sure here, but I am just looking at the big picture and the volumes and the way to stock price is acting. What is the reporting on buys making you an insider? Isnt it 2-3 business days? If so, if someone bought millions of shares they will have to file at the latest by the end of the week. If this is what is going on, they have a very small window to buy as much as they can before they have to disclose the purchases and make their move. I am guessing if something is up we will know here very soon.
What can start a proposed BK dead in its tracks? How about a buyout offer...of course one they knew nothing about when they PRd the bk. And of course the company who makes the offer just happened to decide to make an offer the first trading day after the BK pr and bought up a whole crapload of stock for almost nothing. What luck though, because the scenario just happens to make for more money to go around for all those big wigs who are holding the big chunks of stock and wont put up with ten cents a share.
Nothing for sure here, but I am just looking at the big picture and the volumes and the way to stock price is acting. What is the reporting on buys making you an insider? Isnt it 2-3 business days? If so, if someone bought millions of shares they will have to file at the latest by the end of the week. If this is what is going on, they have a very small window to buy as much as they can before they have to disclose the purchases and make their move. I am guessing if something is up we will know here very soon.
JT, I have been in this stock a very long time. Spent many hours doing dd over the years. Here is the deal.....with that VA contract they do not need to file BK. That should be enough to put them over the top profit wise now that most of the Dmerc audits are completed and they have paid that money back. They are not going DARK or whatever that means anytime soon with or without the chap 11. What would be more fair is for them to dilute us maybe at like 50% and give that to the 290m debt holders. 100% is just highway robberry and just unethical IMHO. They know this I am guessing. So, no, I highly doubt they would also award a 70m VA contract to a company that was going under...dont you think JT?
Here is a good read IMHO. If the big shareholders want to do something about this, I am guessing they have the ability to do so.
http://www.turnaround.org/Publications/Articles.aspx?objectID=9658
JT, no disrespect, but I am wondering how much investing experience you have? Although I do agree that this is not over by any means at this point, it states it clearly in the 8k what Big Yank was saying about the .10 per share and the shares being canceled. Just can not believe anyone who has been investing for awhile would miss this. Here is the link.....
http://www.sec.gov/Archives/edgar/data/1175108/000117510813000007/a20130315form8-k.htm
Here is the quote in the filing JT where it plainly states the .10 cents that is planned for the common shareholders.
"and (v) the distribution to existing common stockholders of ten cents per share of common stock, with the aggregate amount so distributed not to exceed $2,620,000; such common stockholders would cease to have any continuing equity interest in Rotech."
Either way JT, I really hope the large block stock holders will fight this because they can see how unfair this is. Because I honestly think that it is not fair that those debt holders will end up getting a 575m a year company with 235m in debt roughly(making rotech seriously stable) for only 290m dollars? How in the world is that fair at all. That is just not a fair price at all and is definately not fair to the current equity holders IMHO. And, this is also very unfair considering this new VA contract is the first time in many years they have added something that will increase their revenues drastically and would make them more stable. They are on their way to screwing the current holders out of stock and equity unless the big stock holders who have enough shares to pool together and get control of the company do something about this and take action and remove people who are in control and trying to do this unfair reorganization.
Big Yank, I see what you are saying about the 10 cents. However, I see three real scenarios here, not just one as you say because they have not filed yet and nothing is absolute with this plan.
1. It plays out exactly like it says in the current plan and it is filed and discharged leaving 10 cents a share.
2. There are a ton of heavy hitters who own somewhere between 50 and 70% of the stock based on the filings by my estimation. They may try to block this chapter 11 or force the debtors to caugh up more money per share to complet this and take 100% equity. Or, they could force them to reduce the equity they will take to a lower level and give us a place at the table equity wise in the new company. There are alot of options here. But considering there are some big investors here who will lose some huge money, I could see this maybe happening also. Really IMHO, I do not see if 290m debt holders are willing to do a debt for equity swap how or why exactly they they would need a chapter 11 anyway. Why would they need one when they are willing to do the debt for equity swap unless they want the whole company? Really do not see the point to it other then trying to totally screw the common stock holders out of their stock and equity and make the company private. In the end, I think there is maybe a solid chance there will be some changes to the current outline.
3. This could all be a ploy to force the hand of the other two nationals and Pacific Pulmonary to make a decision knowing they are not going to be able to get the fire sale they wished for when Rotech closed up shop. IMHO, this could force an offer or a buyout offer now also.
I am not saying you are wrong Big Yank, you may very well be right in the end, but what I am saying is there is more then one way this could come out. Seen it happen before. Check out Highland capitals buyout of American Home Patient prior to bk for example. The PR and way this is structured is not set in stone until it is completed. But, IMHO, 2.65m and tranfering 100% equity is boardering on stealing the company considering they are now going to be profitable with the new revenues from the new VA contract even with the standing debt. I think the SEC needs to start watching this company considering maybe whoever refied the 290m knew when they made the loan it they would end up with the entire company if things failed. Very probable. Nothing for sure, and I have no way of knowing what happens behind closed doors with this company, but this whole structure of reorg seems overall highly suspicious.