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junk, I'm afraid saying "lopped in half" was way tooooo conservative. I'd expect Ray to sell $75mm worth of shares to make it even worthwhile. That's an O/S moving from 25mm to 75mm at $1.50/share dilution.
You're spinning the movie WS:MNS to be talking about HDY? Come on man! I was invested in ERHE from 2000 to 2007 and that supposed "nation building" STILL hasn't happened for Sao Tome.
And that potential upside is going to get lopped in half if Ray dilutes the heck out of the company because he likes paying buddies' law firms big bucks.
I agree his comp isn't enough to swing the needle when Ray is spending obscene amounts on legal and salaries.
Uhm, yes it is. If Tim Cook gave that information to you, and you sold based on that news. You committed insider trading because that information is MNPI. Is it that hard to understand the rules are different for insiders?
Nope, not true. Looking up the definition of insider trading does not make you an expert. Insider trading can involve insiders OR outsiders trading on material non-public information, but the rules for insiders isn't black and white per the definition. I'm going to have to spoon feed you guys :
1) Insiders can still sell when they have MNPI under a 10b5-1 plan.
2) Insiders can sell when the GC or other executive in-charge approves an insider to conduct a transaction when the company is not in blackout because: a) the insider attests to not trading on MNPI and/or b) the non-public information available at the time is not considered material enough outside the normal course of business operations (i.e. i'll spoon feed again. Tim Cook has known for the past 6 months that APPLE is going to release an iTV in 12 months. The public might view that to be material non-public information, however, that does not prevent Tim Cook from selling if he sells for other personal reasons and the GC approves it).
3) Blackouts are not fail safes. Insiders could still trade illegally. Blackouts are to establish to the SEC that internal controls have been put in place to reduce the appearance of impropriety.
This spacecityguy says the Lord cannot sell because he has MNPI. That's not correct. If he's not subject to a blackout, he can still sell if a 10b5-1 plan was put in place before now. He can also still trade if the reason for his trade is based on him leaving the company and not on any pending transactions. Good luck on proving he sold on MNPI when he just left the company and publicly stated his reason for doing so. He has a right to liquidate his holdings if he needs the cash.
You seriously just asked that? Did you not read my posts on company blackouts?
Really? 100% fact? Is your 100% fact multiplied by 0% actual experience in executives and BODs selling stock? Because your 100% wrong. You might want to look up the term blackout like I said. I'm a former executive of a publicly traded REIT. We were blacked out the day of quarter close until 5 business days AFTER earnings releases. I sold stock plenty of times during non-black out periods when I could as I thought the company was fairly/over valued at times. I even sold on the day of our IPO years back. The Lord can do as he chooses as long as there isn't a blackout and restrictions on his stock.
The board should be sued for lack of fiduciary duty. A reasonable and competent board would be reviewing and approving budgets sent to them by executive management. Yet, the BOD continue to let Ray spend like a drunken sailor. Lord Owen's resignation shows the BOD is in kahootz (sic) with Ray as they won't fire him or cut his spending for him.
There has to be kickbacks and/or Ray didn't put out the legal work for bid and gave it to a buddy.
I've dealt with FCPA in other stock investments, for which management was OPEN ABOUT EVERYTHING. The government usually sends information requests. You send them the information. You wait. The government asks questions. You respond. You wait. The government asks more questions. Your respond. Eventually the investigation wraps up. To pay a lawyer the fees they have is absolutely egregious (I won't go into the executive salaries). All the information requests could have been handled internally as HDY has the data, NOT THE LAWYERS! You could then have the lawyers handle all formal responses to the SEC/DOJ. The whole thing is corrupt.
Ray is speaking for a number of reasons:
1) to appear that he is acting as the CEO of the company when we have no idea what he does other than pleading with Tullow to drill and collecting his ridiculous paycheck
2) to try and establish himself as a credible oil executive in the case HDY fails.
That's 100% FALSE. Insiders can sell during non-blackout periods if the stock held has no restrictions.
White,
I only interpret that statement to mean:
"Tullow won't even talk about proceeding until the DOJ finishes their FCPA investigation. HDY has spoken to their local Congressman but we are unable to speed the process along."
Same with this board. Not much going on. I am getting a little concerned Tullow may get cold feet on drilling Fatala with all their poor drillings recently. Especially since they pulled that FM garbage. I'd have to read the signed agreements to see what avenues of recourse HDY would have if they reneged.
TeeDog, interesting you bring up Jason Davis. Do you know him personally?
I've always wondered what the hell he did to justify a $300k+ salary for doing jack squat. He's not the CFO, he's not the controller, and a finance department is not even needed.
They don't have any pull with the DOJ. JPM didn't get off even though Jamie Dimon gave/gives millions to the DNC. Fact is the DOJ marches to their own drum. They have to come up with fines in order to keep the bureaucracy in the news. Granted, all this DOJ extortion on the WS banks is primarily funding its operations, but the FCPA division hasn't had any big wins lately. Not saying they will with HDY.
Note: I expect them to wrap up their investigation this fall. It usually takes a year and I can't see how the paperwork is that volumnious for HDY.
I bet those guys are twiddling thumbs doing jack and squat. They get $60K-80K, for what? Flying into Houston once every quarter to review the limited financials and having a steak dinner on the company dime that night? That's a pretty nice gig for being retired. What's even more egregious is the fact these guys get a VERY HIGH directors compensation fee for a sub-$100mm market cap company. My previous employer was a legitimate publicly traded REIT with a market cap above $1B, and our directors averaged $55k PER YEAR. They had to review REAL financials, had actual committees that made decisions (audit, compensation, etc), and would have multiple conference calls every quarter in addition to their quarterly in-office meetings. They also approved dividends and reviewed M&A transactions. HDY's directors don't do jack squat.
I hope I'm wrong and that all happens. Just tempering expectations. As we all know, the Company could have billions in reserves but if somebody isn't willing to pay $50 on the open market for HDY, its not going above $50.
You have to downplay SP expectations. The market is never going to place this at more than a $2B market cap with a discovery. And nobody, until they drill appraisals and other wells, will pay over $1B. Reason? You don't pay $1B unless you know you'll make way more than that back. You pay $1B because your financial metrics show you'll bring in revenue of $3B on costs of $2B ($1B for purchase, $1B for drilling).
There is going to be a large discount in purchase price because HDY doesn't have much negotiating power. That can't say "well, we dont' like your offer so we'll drill it our self."
That's pre-dilution. I'm valuing on market cap. Not where its gone before.
This isn't going to $200/share (market cap of $4.4B). Ray is 60 years old and has 300k+ shares. Not accepting a price of $100/share would be ridiculous. That's a $2.2B valuation. I think a $50/share valuation is more likely a selling point. We don't own 100% of concession.
Yep, although on a share price I see this as more of a $0 to $25 by end of 2015 situation. Unless Ray has a brain and sells the company right after discovery for a billion (which would be a SP of $45 approx). I think any higher would be a tough sell. Tullow doesn't the have cash + stomach to dilute their equity more for a greater than $1B deal IMHO. And we don't need to be in the oil extraction business which is years down the line in case of a discovery.
I wouldn't worry about the Controller leaving. DePue was only 30 and really only put together the financials into SEC format. The accounting isn't that difficult for this company. It's nothing but salary and business expenses with minimal assets. There are plenty of CPAs that will come in for the $130k salary he was getting (which was high for that position, but I guess it had to be considering the ongoing concern of the company).
If we wanted to speculate, we'd want to know DePue's family situation. He could have a family and be moving. Or just wants a more stable company and got a better job offer. I wouldn't speculate he saw something and was bailing. He owned minimal shares and probably was only looking out for his long term career.
Agreed. I'm surprised Tullow hasn't announced FM on the government!
Don't confuse new purchases from "new money" as meaning news is coming.....
Will do.
I didn't invest in this company. My days of investing in non-reporting, dilutive, OTC stocks ended years ago. I learned my lesson in mid-twenties.
TECO has already hurt good people. My friend lost his entire life savings on TECO.
Had a thought this morning: the possibility that Tullow tries to get out of their obligation and sell back or forfeit their interest to HDY. Of course that totally screws up the PSC timeline in that another partner would be needed (and the Guinea gov't isn't exactly "functional" right now).
Changed my limit orders this morning and I now have equity in HDY. Just a small portion for me now in my HSA. 2.50 seems to really be holding (was hoping to get a little less than that). I'll purchase more (or options) when more news comes out.
You would think those people would come together after beating the Ebola outbreak.
Get paid longer? The AGR lawsuit being resolved means the HDY's AGR lawyers get paid and that's the end of them. If I had to bet, that's what took up more of the legal costs in the most recent months than the SEC investigation.
FYI, I've finally got some buy orders in on this stock. I've been waiting and I think the downside has been limited. As tdbowie has said, they are likely working out the drilling details and they know they have to do so quickly with concession time running out day by day.
Those materials are likely worthless. Could care less. Cash is king. Again, best part is legal fee burn should go down.
Yeah, only problem is the DOJ/SEC may take 1-2 years to settle. Even though Tullow pulled Force Majeure, still no drill timeline. Ray still doesn't deserve a bonus this year.
Well, we can turn off the drain from AGR legal fees at least. Ray better ratchet down the G&A in Q2.
Sorry, I'm late to the party but isn't CEPSA supposed to cover most of their capital needs they disclosed they plan to raise in the 10-Q? I'm debating on putting my toe in the water, and dilution is a concern:
ERHC's future plans will depend on the Company's ability to attract new funding. The company is planning to raise up to $48 million over the next 18 months to fund exploration programs in Kenya and Chad. The fund raising might include:
· Farm-outs of part of the Company' s assets in Kenya, Chad and the Sao Tomé and Príncipe Exclusive Economic Zone
· Issue shares of common stock through a registered direct offering
· Convertible Loans and other debt instruments
· Other available financing options
Is that stated somewhere (my apologies, haven't seen it)? I thought HDY was suing for an undisclosed amount + $10M of supplies, while AGR countersued for $22m. I was using the $22m as a source of basis.
My main point is still that Ray is spending millions of dollars on a lawsuit that is ridiculous in that: 1) is burning capital 2) no guarantee of winning, and 3) even if you win, more money will be spent on appeals. The lawyers should have been hired on contingency fee. It's going to cost probably $10M and there is likely to be no recovery for many years EVEN IF THEY WIN!
Well, if Ray was fired by the BOD, the stock may go up...... That moron apparently didn't sign a contingency contract with his lawyers on the AGR lawsuit.
Here's the kicker in the 10-Q that shows Ray should be fired:
"We incurred approximately $4.8 million in legal and other professional fees associated with the dispute with AGR in the nine month period ended March 31, 2014, and it is likely that we will continue to incur significant expenses in the next several months."
LOL, so Ray is going to spend maybe $10M on a $20M lawsuit? For a net gain of MAYBE $10M??? Seriously???????
It wouldn't surprise me if Ray doesn't have an "arms-length" relationship with the law firm. Any rationale business person would not let their lawyers fleece them unless they was something shady going on.
They redeemed their government securities this quarter. They basically have blown through the cash value of those (15M) and then some in nine months.
Total G&A is still over $8M this quarter which is only $200k less than last quarter. That is UNACCEPTABLE. I mean WTF. Is the law firm being allowed to charge anything they want? There should be a taper in fees. You aren't going to be responding to the DOJ/SEC, 40 hours every week. You respond to their requests, wait X days, respond to their next questions/requests.
And is Ray flying first class at $15k/pop to London for these "one-sided" negotiations. What a f'ing joke.
Ummm, I specifically posted for everyone to calm down because of that sentence.
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