BDCO - ha Bmrboy. I guess my ultimate take on BDCO is it's not a little risk, but a lotta risk. Hweb probably uses the better term of it's a gamble. Because to me, the risk is existential, as in, the company might not exist tomorrow. Lenders very clearly still have the right to accelerate the loan, foreclose, do whatever.
On the flipside, the reason the trading pattern of the stock kind of makes sense to me (moves up into earnings, then crashes after), is that if/when the company ever does say they are no longer in default on their debts, well, now you have a very different risk level and you really could see the price move up 3-5 times in a period of days, weeks, or months. The company *claims* to have made $23m in net income in 9 months, and yet they're STILL not out of default on $63m in debt?
To be fair, the company now shows $6m in cash, (but mgt says this will be used in the near term to re-pay past due amounts to Veritex). Company also shows about $16.5 more in inventory. So, if it's all true, it sort of jibes as to where the $23m went. And debt (excluding accrued interest) is down about $5.5m, so maybe some progress is being made. But doesn't seem like they're out of the woods. The share count has also increased by 2m or about 17%
And probably the biggest issue for me is that you have a CEO that is purposely keeping shareholders in the dark regarding the defaults. That's not good. Anybody on this board knows full well that if we were CEO and trying to give an honest picture to our shareholders, we KNOW the sharedholders would want and deserve to know about the default situation. Is it improving, what's the gameplan, what's the timeline, what's being done, are we paying off one at a time, or a little to every lender to keep them all happy? Instead, in press releases CEO boasts only about the income statement and doesn't even mention defaults. If you just read the press releases and not the filings, you wouldn't even know the company is deeply in debt and default.
I never like to see that kind of differential disclosure. So I think you kind of have to know, going in, that you're dealing with mgt that is less than forthcoming, on purpose. What else might they be purposely hiding?
So it's sort of a hold your nose and take a small gamble type of situation for me.
