Freeport-McMoRan (FCX)

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http://www.rktaxlaw.com/services/tax-debt/

Tax debt can eat up earnings if not paid. It can be a short term solution too credited capital. Receivables are as important as payables. If a company has a hedged position on gold and the price goes up forcing investors to leave and go with the one not hedged the stock will fall in value as the capital markets get cut off.

If there taped out in cash as well as in collateral offering the only thing left is too take on convertible debt.


A solvent company has too have revenue after tax’s be equal or greater then it’s operating cost.

They can have revenue but does it exceed the costs to obtain that revenue without borrowing equity, or debt of any kind.

If the depreciation costs are out stripping the net revenue forcing the company too take on additional debt I would throw caution to the wind. If there using tax debt “ not paying there tax’s too support the revenue process the issue could fail.


No risk, no gain but the question is how much are you willing to pay to hold such a position. My feeling is no more then half the operating loss or half the depreciation or half of all the debt. It goes above that point you sell. Below that you pick up more only if you were able to take a profit.

A group member was saying know your numbers, know the risk your taking. Those are the best healed words I have ever heard. I can’t count the number of times that I have heard from novice investors say to me, Frank there paying there debt costs. Yes there paying there costs but they are getting squeezed out of the equity market and getting very close too the tax debt threshold too service the tax debt at 10% or retained earnings on capital surplus of the tax debt.