T.G.I.F.

134 thoughts on “T.G.I.F.”

1. Greece Update – a lot of moving pieces once again on the Greek front. During the overnight session, spreads remained wide. However, Reuters reported this morning (starting to hit the market at ~4amET) that Greece will make a formal request to have the IMF/EU rescue package activated (Greece’s Papandreou made the request at ~5:55amET and another press event is scheduled for 7am according to wire reports). The news that an activation request was going to be made is helping to tighten spreads slightly (recall they were at record wides again early Fri morning) although the markets are still skeptical. We are still waiting on details on when, how much, and in what form, assistance will flow to Greece (it still seems like some countries, inc. Germany, could see internal legal challenges to their pledges of aid….although a Reuters headline this morning says that any delay in the German parliament on this issue wouldn’t jeopardize Greek aid). The EU Commission said it has only just heard of the Greek request this morning and will decide on the release of emergency loans to Greece after it has determined whether the aid request is valid. It was assumed that when the EU/IMF officials came to Athens this Wed to discuss the terms of an activation that such a request would be made and traders are viewing this morning’s announcement as an attempt to tighten spreads back to more reasonable levels. The markets still have their same concerns: 1) not clear if the IMF/EU rescue framework will be enough; 2) not clear if Greek populace will tolerate further austerity measures (judging by the continued strikes); 3) not clear if Greek statistics are even viable (see Thurs morning’s large revision to the prior budget deficit). There have been a lot of articles this week (starting on Tues morning in the FT) talking about how a Greek debt restructuring of some sort is inevitable.

2. Fund Flows – from JPMorgan’s E Beinstein – HG bonds had $882mm of inflows on the week, up from $737mm last week and about $625mm the 2 prior weeks. HY fund inflows were $512mm compared with $282mm the week before. Equity funds had inflows of $2.1B, reversing 2/3 of the surprising $3.3B outflow last week. Money Market funds had very large outflows of $33B, similar to last week outflow of $35.6B

3. Yesterday’s Trading Action

   stocks demonstrate strong resiliency, shrugging off a handful of meaningful negatives (inc. a bunch of weak earnings, further deterioration in Greece, and financial regulatory reform risks); sp ends up 2.7 points pretty much @ highs of the session. What caused the intra-day turn? Stocks caught a bid as the Obama address wound up and the president failed to unveil anything incremental to the market (i.e. the bulk of his text was out in the morning). In addition – as Europe closed the headlines out of Greece started to abate and US equities started to act better (a phenomenon we have seen in recent weeks). CNBC broke in later in the afternoon w/its second update on the GS/SEC case in as many days (on Wed CNBC broke in to report that ACA was aware that Paulson was short the CDS in question and today stated that ACA had a hand in selecting the underlying component securities, in some cases including paper that was of lesser quality; GS shrs, and the broader tape, rallied on the CNBC reports as they appeared to weaken the SEC’s case). A lot of the shorts that became aggressive on Fri laying out exposure on back of the GS/SEC headlines have been covering really since Tues as the market failed to break lower. There was never a ton of real vanilla selling on Fri or Mon. That said, a lot of the strength into the close Wed and again today is predominately short covering (vs. real money buying). While the desk did note some buy interest on the weakness this morning, larger vanillas aren’t chasing prices higher and remain largely on the sidelines.

4. Re 1. Sounds like a band-aid when what they need is a tourniquet. Germany may balk over the weekend. Maybe if they renamed Athens something like New Berlin.

5. The whole idea that the likes of Greece, Italy, Portugal could share the same currency as Germany, France, Austria, The Netherlands when their economies, taxation, inflation, and general attitudes toward commerce differ so greatly… well, it just never made sense to me. Guess it’s like California, Texas, Iowa, Florida, NY, and NorthDakota all sharing the dollar. Still… just seemed like “if” and not “when” we would see something like Greece happen.

   I honestly don’t see how the euro will hold together in the long run… but that is probably just my Dogma showing thru.

6. Analyst Watch

   RBC starting refining sector today. VLO at perform, TSO at underperf, HOC top pick, FTO at Buy (wife still owns it and I will never hear the end of it).

7. Way to stick to your guns on EXXI by the way BOP.

8. SLB called up large on their earnings, putting some bids under the rest of oil service too.

9. SLB call about to begin.

10. Ram, Bond, you guys able to get in here today?

11. SLB reading the press release. Ugh.

    ROSE starting to look interesting to me again, has been basing since the last leg up.

12. SD – sizable pre market volume. Eli – you are on to something with your comments last night.

13. HK announces Analyst Day on May 24

14. TechTrader out with a 55/45 LONG call this morning.

    HeadTrader’s Parrot still squawking “If you’re not long, you’re wrong.” And pointing out that durable goods (when broken down, looking at the details) was quite positive. (HT said that, not his parrot)

15. Analyst Watch: NE EPS lifted at Stephens, remains their Top Pick.

16. SLB basically read the press release, Q&A starting now.

17. SLB – we have now severely restrained the acquisition pipeline.

18. SLB – Russia Watch – if they want to maintain their production level they will have to go back to work in Western Siberia and there are indications they plan to, via tenders.

19. SLB’s view of the current cycle – last cycle we saw a huge amount of natural gas projects overseas (LNG) ramping up. As this cycle gets underway, this cycle will be related to oil, inside or outside the United States. Sees confidence is going to grow, particularly in offshore projects. On land it will increase the oilfield enhancement projects.

    Gas will be very much affected by the amount of LNG just put on stream (duh) and the shale gas (double duh).

    Getting more deepwater activity earlier than we thought, which is part of the reason they are bumping up their capital spending now.

20. SLB – should stay strong today. Should carry HAL and WFT higher with it in my book.

21. SLB – “we constantly look for places where we’ve lost market share and we constantly fail to find it.” Independent data confirms.

22. SLB Notes –

    How do you see exploration side on deepwater and how this turns to development drilling?

    Deepwater – programs that have been announced seem to be happening, which is unusual. Rates coming down will inspire exploration.

23. SLB up 4%+ at the open. My sense is that it goes higher.

    ESV and ECA moving on up here.

24. SLB saying all the right things with a much more bullish (for them as they are notoriously conservative) tone. Stock tapping $72.

25. HK taking a page of out EOG’s book with an analyst day?

26. Running to a meeting, back in an hour.

27. Anyone else watching AXAS? Buying seems to be ramping over last week regardless of overall mkt.

28. OK… I feel a rant coming on… it’s Friday and I can’t control these by the end of the week, so here goes…

    I think HK can improve it’s standing in the Investment Community by showing that Mr. Stoneburner (and was there ever a more appropriate name for an E&P CEO?) is firmly in charge. And here is hoping he is! Rumor has it that Floyd Wilson (when not interviewing for Wife #4) was attracted to the Shiny Bauble of Common Resources and threw in a bid. This would have resulted in more stock and bond issuance. I shudder to think of the backlash there.

    Mr. Stoneburner had better publish his version of the Rules of the PetroHawk Game… make it very clear… then STICK to those rules. (Kinda like staying married to the same wife… which is not a page in the Floyd Wilson Playbook).

    I own some HK, but i swear, this is my Last Rodeo here. They don’t stick to what they promise to do (no stock issuance, organic growth) for the next two years, I will toss HK on the Rubbish Heap of Stinky Fish Heads for Life.

29. #28 – I couldn’t agree more. I will say that thus far in 2010 they have stated a plan and stuck to it – even dialing back the drilling a touch. I am hopeful this newfound discipline is here to stay.

30. Stoneburner made a presentation to Dallas Investor Forum a couple of yrs. ago with the stock at $26…told us buy it, it will go higher…with a wink said he didn’t want to own HK stock forever himself…

    been a hard hold but he’s impressive to listen to…have no idea re: Wilson…must be related to Charlie Wilson, deceased congressman from Lufkin somehow eh?

31. FWIW, for those stubborn enuff to hold WRES…it is back in the resistance range where the secondary was done….

32. I mentioned WRES to friends and am thankful it is back to where it is…4000% guaranteed to screw up putting a friend in a stock…

33. unless you or BOP that is…she makes her picks count

34. jivey — i totally agree with you… i mentioned two very risky (but potentially high return) stocks on this board, b/c i think they have some unusual potential. But it is difficult to watch them bounce around and drag out in time, knowing that people listened to me. So, that said, I promise to post on this board when I think CIGX and PAYD are no longer on track to do what I think they can do.

    Timelines get stretched out far longer than I thought… and I do hate letting people down. So, will let you know if/when the recommendation changes in either of those two micro-digit midgits.

35. I didn’t buy either of those last two…but have made a enuff to buy a couple of ponies with KOG/EXXI and have some left over…you’re the best. most on here understand that you can only give us your best insight..which is invaluable..thx a lot

36. AXAS – I can’t get my hands around the story. Sounds like a “wannabe” in so many plays, no focus.

    HK – hear ya, I think they have to stick to the new discipline. Floyd flatly denies he is interested or bidding on Common Resources.

    Minnows swimming well today watch:
    TAT testing $4
    SSN inching higher
    WRES over $3 (oh well, can’t kiss all the girls)

    SLB – would have probably played but I could not skip my meeting

    WHX – getting back yesterday’s profit taking, still no news, but seeing good reports on distributions from MLPs. Royalty trusts probably put in very good numbers for the quarter.

    ECA waking up, I still think it has $34-35 potential near term but I won’t hang out that long to make sure as it is a ZIM trade.

37. damn did V put out another buy on gold…geez

38. re SD, aside from bank line renewed, and being cheap relative to other E and P’s do you think it is moving with NG. Or is there another explanation?

39. z — TAT… can you justify the price (given the country risk) based on their production and reserve profile? Or does it hinge on the (very justifiable) “Malone Mitchell III” aura. Thanks.

40. NFX cleaning up before earnings next week – they could have an Eagle Ford well to talk about with ECA.

41. Z: Has the SLB call made you more/less committed to the on-offshore driller space.

42. El – re SD, Eli theorized last night that a seller was exhausted, taking pressure off the shares, sounds plausible.

    TAT – a doubling of oil production from start to finish in 2010, with another 50% in 2011 will give you a little multiple boost. They are also moving from 0 gas at the end of 2009 to something north of 15 mm/d this year in a $9+ gas environment. At 10x this year’s expected CFPS it’s high to normal E&Ps but not stratospheric.

43. elduque for what little it is worth here is my 2cents from last night:

    elijahwc Says: SD – This is important. The good news is that the next to the last block of stock (7 mil shrs / $50 mil proceeds) sold on 4/20. The bad news is that the seller was Fairfax Financial who are Buffetish.

    Z – looking at the volume from 4/5 to-date SD has me thinking “in the money May 7’s @ .75”. Only .15 cents premium. While I don’t know if Fairfax was indeed the next to last block or who will be, I am pretty confident that this dog can hunt again as sufficient time has elapsed to allow SD shareholders to vote with their feet on the ARD transaction and that the aforementioned volume is indicative of this. Do you see a better entry or strike?

44. re 41. More committed to Service in general, renewed interest in deepwater although it will be a slow process there, probably too slow for options. I may just buy some ATW and sit on it. The other ancillary play there I am thinking of taking a piece of is OII but I plan to wait for the call as they have been rumored to be having some delays on their umbilicals biz.

45. z — #42 thank you for your answer.

46. Eli – I’m not playing SD with options for now. If I did I might take May $7s.

47. Z: Do you expect the litigation problems to keep RIG in the penalty box?

48. Z, not clear to me why SLB is so strong this AM, was it the tone of the guidance/Q&A-I’ve been watching this like a hawk and completely missed this move.

    Thanks

49. Tom – Don’t know, have not seen much on it yet. I prefer to look elsewhere unless it really beats them up. Tough situation all around.

50. RE 37: Volatility like this is expected. It will probably position to break the last resistance next week.

51. Z: For offshore over the next 6 months, I have ESV #1 and NE #2 for performance. ATW’s small fleet gives me pause but in this space increased cash flow and earnings is unusually good. I know the amount of JU’s gives you pause re NE. Remember 74% of all proven oil reserves can be reached by JU’s. They are the linemen. Alot of blocking and tackling just not as sexy as the Qbacks and wide receivers with the big contracts.

52. Re 48, for my opinion, tone of the guidance, the pull forward of the bottoming of international margins, the increase in capital expenditures and the implications for ’11 revenue growth, the great performance of NAM after a Q4 in which SLB lagged in NAM… all of these things mean that estimates are going higher and buyside confidence in those estimates will also increase, at least for the next month or so.

    Talking my book, quite biased, but that’s my view.

53. #52-thanks, jat

54. Jat – absolutely agree. Biding my time today.

    Tom – I hear ya. I think ATW sports the best earnings growth profile in the group by a long shot but they do have small fleet risk.

55. ESV inching into new territory.

56. GST bought some today…Marcellus horizontal has spud

57. Reef – little names running, could work, they never had anything in the Eagle Ford I take it … too far south?

58. ZTRADE – ZIM – SLB

    SLB – Bought (10) May $75 Calls for $1.07 with the stock at $72.15 (up nearly 6%) after earnings. See site comments today for more reasoning but suffice it to say the outlook for SLB is improved both in North America and in the International segment, the tone of the call was more optimistic and estimates are likely to move up from here making the stock sell for less of a premium than usual to its peer group.

59. Analyst Watch:

    S&P just raised ESV from Sell to Buy; target upped $16 to $56.

60. Macondo was capped by the way:

    http://www.upstreamonline.com/live/article213011.ece

61. For the AAPL iThings fans this is pretty nice.

    http://www.pionline.com/apps/pbcs.dll/article?AID=/20100419/PRINTSUB/304199984/-1/TOPIC

62. Eli – thanks, the CNBC app for iphone is without equal. I’m waiting on the iPad for V2.

63. story soon to appear on Dow: NY Regulators Issue Strict Rules for Drilling in Watersheds.

64. … followed by NY Regulators recommend raising your own sheep for blankets

65. Is the oil platform explosion going to cause any grief/scrutiny from regulators? I’m not familiar with offshore politics.

66. Why isn’t Greenpeace out there making a big scene like they do here?

67. No seals in GOM. 🙂

68. No seals in Fort McMurray either.

69. V – Best guess would be yes, some, but no changes come out of it.

70. EOG starting to reverse early profit taking again. They don’t report until May but there are some notables from out list that may affect them next week including WLL and I think BEXP although I’m not sure that’s a good date yet.

71. Rig count dropped, first time in 17 weeks

72. Rig Count Watch:

    Oil up 8 to 514 vs 202 a year ago.

    Gas down 17 to 956 vs 742 a year ago.

    Horizontal down 1 to 753, still right at the highs.

    From everything I’m hearing I would not anticipate a big drop in gas rigs any time soon. Pipe is going to get even more expensive. Will listen to the X call next week on that.

73. NG gain on the day doubled since the rig count number came out.

    NG up 13 to 4.26 now.

    Oil up $1.10 to 84.80.

74. SLB topping $73.

    EPS

    2010: $2.85 25x

    2011: $3.81 19x

    HAL is trading:
    2010 24x
    2011 16x

75. TS another name on the pipe idea to consider.

76. perhaps the pitter patter of nat gas shorts covering on the nymex with 30 min to go?

77. 1520 – yep. Surpsied so little reaction for GMXR yet. GDP moving, even HK moving. EOG recovered all the profit taking (for the umpteenth day in a row).

    WLL breaking out big time on the daily chart. Still holding my deep in the money $75 call there.

    Heck, even ECA waking up.

78. SWN with a nice move… HK has had a big parking brake on it – nice to see it still can catch the wave when it comes.

79. SWN – been hearing takeout rumors there. I think it’s more likely they take someone else out in the FS. (HK would fit Reef’s comment the other day).

80. Z: What kind of wine will you be opening this weekend?

81. Nothing fancy. Root:1

82. 79 – I would agree on the HK FS acreage idea. I think they have some shared wells in there already or maybe it was that they were sharing seismic? Would certainly be a fit for SWN at the right price.

    No idea on SWN takeout – you would know better than anyone I know…

83. SWN ops some of their wells.

84. some more good action in those HK May 24s – somebody just picked up about 1000 contracts

85. SD – Okay, color me confused. Briefing.com is commenting that “This week we’ve seen notable insider buying in the following stocks:

    * SandRidge Energy (SD) 10% Owner Fairfax Financial Holdings bought 11,530,000 shares at $7.02-7.69 on 4/7-4/20

    Last night I noted the Form 4 that was filed saying they sold 7 million on 4/20.

    Further examination further shows 3.5 acquired between 4/7 and 4/16

    Beats me as I’m pretty sure Fairfax is not a short termer in just about anything. Something more here?

    Stock bottomed and is going higher.

86. Z: I going for a Pinot Noir J 2007 Russian River Valley.

87. J makes a nice sparkling white too.

88. Turley and Tablas Creek for me- I was in paso robles last weekend and picked up a few bottles

89. A – I hope to be out that way in June or July. It’s so slow on the site around that time you may not notice I’m away.

90. May be better to watch the vines during that time.
    NFX rolling today. Are you thinking about playing that one for earnings?

91. SD digging deeper.

    Well Tom Ward got him one heck of a partner…..all of the filings are either purchases or in this last filing the creation of a mandatory convertible preferred.

    http://xml.10kwizard.com/filing_raw.php?repo=tenk&ipage=6902538

    From the footnotes:

    Explanation of Responses:
    1. Following the transactions reported herein, 277,000 Common Shares are held by V. Prem Watsa and the remaining Common Shares are held by subsidiaries of Fairfax Financial Holdings Limited, including, following the transactions reported herein, 897,600 Common Shares held by Odyssey America Reinsurance Corporation. United States Fire Insurance Company no longer holds any Common Shares.
    2. Each Preferred Share is convertible into 12.4805 Common Shares, subject to adjustment under certain circumstances.
    3. The Preferred Shares are convertible at any time at the holder’s option.
    4. After February 20, 2014, Sandridge Energy Inc. may cause all outstanding Preferred Shares to automatically convert into Common Shares at the then-prevailing conversion rate if certain conditions are met.
    5. The Preferred Shares are held by subsidiaries of Fairfax Financial Holdings Limited, including, following the transactions reported herein, 69,000 Preferred Shares held by TIG Insurance Company, 88,800 Preferred Shares held by The North River Insurance Company and its subsidiaries, and 487,600 Preferred Shares held by Odyssey America Reinsurance Corp. and its subsidiaries.
    6. 8.5% Convertible Perpetual Preferred Stock (Preferred Shares)

    This is a complete end run on the street and he really upgraded his shareholder base.

92. Z: HK over $23 **** That is my sign for happy feet.

93. re 90, subash out very positive on nfx today.

94. Jat – has he mentioned more granite wash and the EFS well or is he just saying how cheap it is?

95. Afternoon everyone.

    Still favoring the upside despite the fact that it is so laborious. I am still favoring a push towards the 1224 plus area although I have one count that would allow for a small pullback first.
    Cycles are not favored to top this side of the 27th April.

96. SD – for those unfamilar with Fairfax and Prem Watsa he has a cult following in the deep value community and as many of you know they go to great legnths to ape each others holding once one of their own makes the case. And if wrong they just buy more.

    Know I know why this goes higher.

    Little history of Fairfax (FRFHF) below.

    http://en.wikipedia.org/wiki/Fairfax_Financial

97. it is all the usual, plus the new acreage in s. baaken

98. Jat – thanks.

99. Planning on cashing some tickets in the ZIM before the close.

100. FTK power lifting up 20%+ thru 2.10

101. SM has excellent Niobrara horizontal well on south edge of Silo Field in Wyoming. You can look at EOG’s recent presentation to see the area. The well is testing at between 1200 and 1500 bopd from a 5k ‘ lateral. Possibility that this well has not even been fraced yet but hit an overpressured highly fractured zone. Jonah Gas has staked 19 drill sites in this area.

102. West – Thanks, second source on that today. Area flows well unfracced. EOG has a ton of permits filed.

103. West – on a relative basis the Niobrara cabel has started to outperform Bakkens. The universe as I see it are DBLE PETD BBG CHK EOG ROSE SSN WRES and now you have identified it SM. Thanks

     Any other names?

104. CRZO and CXPO, ME too but they’re gone, so that’s APA.

105. 104 was re 103.

106. Comments from the trading desk … Not that much volume in stock trading, but no one wants to sell ahead of the Monday Rally and stocks getting marked up.

107. Thanks Z

108. BOP – wonder if Germany has anything to say re Greece over the weekend that jeopardizes that Monday rally plan.

109. Nio plays also NBL, with a lot of acreage.

110. z — #108, probably.

     On the other hand, maybe M&A Monday is back. FLOODS of money flowing into corporate and high yield bond funds. And where there is cash, there is bond issuance… for stock buy-backs, capex, M&A, expansions… all good equity-enhancing stuff.

111. ZTRADE – ZIM – ESV

     ESV – Sold the (10) $50 May Calls for $2.90, up 120%.

112. http://www.nytimes.com/2010/04/24/science/earth/24drill.html?partner=rss&emc=rss

113. THX West

114. ZTRADE – ZIM – ECA

     ECA – Sold the (40) May $33 Calls for $0.80, up 44%. I continue to hold the $32 strikes.

115. I’m playing SSN for Nio play for recompletion of well that already tested oil in place before newer fracs were available in this area. They just got permits for these wells in Goshen Co., WY

116. Speaking of Niobrara… DBLE is up… a lot. Someone clearly thinks they are sitting on some juicy acreage. That may well be… but it would be Blind Luck. CEO is an honest guy… but he couldn’t find oil in an unopened can of Valvoline.

117. West, right me too. Don’t have a good sense of timing on that, you?

     WLL taking off in front of earnings next week, making me think they are ready with data on the next Lewis and Clark well.

118. how bout the spread on the WLL May 75 call.

     Bid – 10.70
     Ask – 12.50

     with only 25 contracts changing hands today in what appears to be one transaction for $12.40

     That’s all through my ameritrade.

119. re 116 = OUCH

     OK, enough for me. Beerthirty. Have a great weekend.

120. SSN West I’m a me too with you on that one.

121. #116 but BOP he issued these, DBLEP, of which I own a few. Kinda liked them to go along with the MHRprC. Like Sherlock Holmes I am simply addicted to the 7 percent solution (or higher).

122. SSN, I would think as much as Terry likes to flash that they have something in their weekly press release in the next 2 weeks, with operations to commence in the second quarter. They should be able to drill out plug with workover unit and may be able to bypass having to get a drilling rig. The rigs are getting harder for the small guys to line up for 1 well programs. SSN is kinda of option that doesn’t expire pricing, very much like where KOG was this time last year.

123. elijah — you are One Smart Cookie!!

     The best way to play any company that Mr. Dole runs is to get paid to hold it… and take a position that is senior to the equity tranch. Well done.

124. Thx BOP I have always tried to capture the coupon when it exceeds historic equity returns over most and maybe all periods. The rest of my friends are working to hard.

125. Working Hard and Working Smart… Not always an area of intersection between those two sets.

126. Good on Schwab. The ESV’s went for $2.91, not $2.90 and the ECA for $0.82, not $0.80, even though I was hitting bids. That’s pretty fair of them.

127. And West, SNN in addition to the recent new NS permitting, I believe that the workover is within 4 miles of EOG’s biggie that they are fix’in. Also, don’t they have spacing for seven to maybe 12 right on top of the BEXP mules in the Bakken.

     I just love single digit numbers that are undercap’d, thin, unknown, underloved and the smallest house in a great neighborhood.

128. Eli – they have 3,600 acres in the Bakken just west of BEXP. 2 wells drilled to date. 4 more to go on 640’s or 10 more on 320s which they may opt to do.

129. ZCAT, ZIM, ZLT page updated:

     http://zmansenergybrain.com/subscriber-data/holdings-wiki/

130. I don’t know nuttin’ about DBLE, but the chart is very bowl-like. Actually, more of a beaker really. Do beakers count?

     BOP – heard anything on the FTK? I’m guessing today’s bump was hot money chasing anything service-related. But is it smart money too? This is the question.

131. Dman — Kudos on FTK. All I have gotten from my network are Blank Stares when I ask about the company. Most recall it was a very high-flier a coupla years ago… but since the train wreck, they have just let FTK slip off their radar screens.

     Funny thing, I can’t find any fundamental (or public) reason why the stock is up like it is. Think combo of “smart money” accumulation (for some currently-unknown reason) resulted in a chart pattern that the Mo-Mo Monkeys jumped on. But, where there is smoke, you usually find fire… just how large (or small) is that flame? Don’t know. You come up with anything??

132. BOP – FTK was Eli’s idea. I just jumped on board. But yeah, I suspect something is up.

     It could be as simple as “service is picking up & they are now not going away, so they need to get valued higher”. Or there could be something specific, which seemed to be what Eli’s source implied.

     Anyway, if service continues to rock, this could be a good speculative/trading stock. The fact that it is off the radar of almost everyone can’t hurt. Although today’s spike will put it on the Mo-Mo radar fer sure.

     Nice call on the EXXI (again).

133. FTK: In THEORY, a b flat, plain vanilla improvement in business, particularly in the specialty chemicals division.

     Also, they did some balance sheet restructuring earlier this year with some “old friends of the firm” that will help them go bankrupt later than once believed, if at all, if things don’t work out. Yikes!

     Also, they had a properity clean mud a couple of years before it was fashionable to do so and couldn’t make it work at the price points. Perhaps things are different now, but I dont know.

     Finally a CFO for hire with a turnaround resume is close to management and believes that they are investable again. Maybe he will even pitch in and help.

     lots of ifs, whats and maybe’s here and what we need is some boots on the ground that can confirm sales.

     Meanwhile the mo-mos are clearly discovering the name.

     Someone pointed out the 2.50 strike calls about a week ago. If bought its been a handsome return. Are Congrats in order Dman?

134. #133 Well it was a small position & as usual I took profits too early. But it was certainly a win for my new “act now, understand later” approach. Somewhat disturbingly, that approach is doing OK.

     The Sept 2.50s were the only calls with non-insane IV, so there wasn’t much choice involved.

     We can hope that the Mo-Mo Monkeys will drop the ball and give us another look at it. Alternatively, being what they are, they could push it to $4 by mid-Monday.

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