Chesapeake Energy: A Great Time To Bail? [View article]
When is the SEC going to do something and ask questions about why they continue to capitalize nearly all of the interest that they pay? They are showing $12 million a quarter in interest ($4 of that is from IR derivatives) on the income sheet when in fact they are paying well over $150 million per quarter. They are adding significant amounts of reserves to the books. There's no way that you can tell me that 90% of the interest they pay is from debt on properties they haven't done anything with yet.
This is making their income look much rosier than it is. The balance that is capitalized (~$140 mil per qtr) comes out to ~$0.20 / share. That's pretty significant.
All Chesapeake Bulls Can't Be Right [View article]
No position in CHK at the moment, but why is the market selling off CHK right now? This story about Aubrey's loans is almost a month old. Are people this blind to not know about this story?
Sub $10 UNG Is Coming To A Market Near You [View article]
What are your thoughts on nat gas/UNG seeing a pop in May or June and staying "relatively" flat till late July or Early August? Seems like it has done that for the past three years now and I know the past doesn't represent the present, but it's pretty important for options since they have a time component and you could get decayed to death. I've got a few puts that I am up on and am debating on when to sell. Just wanted to see what anyone thought about this.
In the event of default on some of those third party trusts, it looks like you get screwed big time. If Ford defaults on the notes, the trustee just sells the notes and distributes the proceeds. Sounds like a good way to get jacked pretty hard if Ford ever defaults.
Google Stock Dividend: Why 1 + 1 Will Not Equal 2 [View article]
"They don't pay dividend, so the only "value" comes from the greater fool theory? "
You pretty much described most stocks.
"Why can't the founders just sell Cs and keep Bs?"
From the founders letter: "One thing to keep in mind is that immediately after the Class C dividend, all stockholders, including Larry, Sergey and Eric, will retain the same voting interest they hold prior to the dividend. In addition, Larry, Sergey and Eric have agreed to subject their shares to a Transfer Restriction Agreement. This agreement will maintain the same link between their voting and economic interests that exists today, even if they sell some of their non-voting Class C shares. If the founders or Eric wish to sell or transfer their non-voting Class C shares, a “stapling” provision in the agreement requires them to either sell an equal number of Class B shares, or convert an equal number of Class B shares into Class A shares. No other stockholders will be subject to these restrictions upon the transfer or sale of their shares. The stapling requirement will terminate as to the founders when their collective ownership falls below a certain threshold, and as to Eric when his ownership falls below a certain threshold. Further details of the Transfer Restriction Agreement will be included in our proxy, but it’s important to note that the stapling provision is designed so that, subject to the thresholds, the votes held by the founders and Eric will be reduced proportionally as their economic interest in the company declines."
That solves the issue of selling the Cs and keeping the Bs.
"The company could have simply done a 2 for 1 split and issued more shares of GOOG. Their control would have remained unchanged."
That doesn't even make sense unless you are saying that you think that google should have issued more shares and given them to the founders. If the company issued A stock into the market, that would dilute their control. This split is being done because the founders control is being diluted as they convert B shares to A shares and as they continue to issue shares for employee compensation.
Google Stock Dividend: Why 1 + 1 Will Not Equal 2 [View article]
So are you just assuming they will not be part of the S&P and Nasdaq? I bet both stocks are included in the indices.
I highly doubt they will trade at the high differential you say they will. Both represent the same equity in Google while one has pretty much useless voting rights. Any discount in the C shares should get bought up.
With regards to a big insider sale coming up, why? Both founders have sold a ton of stock lately. Why do they want to sell more after they announced this plan? If they want to sell C stock they have to also sell B or convert equal amounts of B to A. That basically undermines their plan for control, so why would they dump a bunch of C shares soon? Doesn't make sense.
Google's Split: A Potential Mess In The Options Market [View article]
They aren't diluting anything. Voting power is the same; you still have one voting share. This is simply a stock split. A new class was created because the class A share count was getting high enough to threaten their control on the company. The A count has risen through employee compensation and conversion of B shares to A shares upon insider sales.
10-Year U.S. Treasury Is Heading For 6% [View article]
Somehow I doubt it. Don't get me wrong; I think rates need to rise but I don't think they will. Ben and the US govt will go to any lengths to defend low rates. Low rates is all they have. High rates detonate what's left of the housing market and more importantly the ability to deficit spend massive amounts of money.
Average US debt maturity is 5 years. Current average interest rate on bills is 0.078% and notes is 2.154%. Bumping the 10 year to 6% is pretty much a disaster when you consider interest expense is already well over $400B/yr.
U.S. Fed Funds Signaling Impending Interest Rate Rise [View article]
How do they get away with raising short term rates? The massive US deficit spending has been dependent on low short term rates. 70% of the US debt matures within 5 years. Add the rollover plus the extra trillion of new debt each year and interest expense will increase rapidly with rising rates. And I doubt the long end will be a safe haven either, I'm sure any short term increase will make its way through the yield curve.
Trading Weekly Options With The SPDR Gold Trust And Others [View article]
Same thing here plus when you add on commissions the ability to take profits is worse. I'm not convinced on these RIC.
Commissions are huge on these and getting filled is not the easiest thing. Seems to me like unless you get a huge movement past your spreads, that you have to either close out for a small loss or gamble and hold to expiration.
GLD was at 162.50 earlier today and my RIC was just break even. Depending on how you skew your RIC contributes alot to the ability to take profits early. Which side most of the premium comes from makes a big difference. 0.24 of my premium came from the puts and 0.36 of it came from the calls.If GLD moves towards the smaller premium, you are naturally in a hole since you are losing more on the calls trade than gaining on the puts. I skewed mine closer on the upside after that big down day last week, you went more skewed to downside.
Chesapeake Energy: Worth A Shot Despite Low Natural Gas Prices [View article]
" Now, however, the stock is trading at very attractive values. The trailing valuation metrics and the forward valuation metrics both suggest that the stock is undervalued."
"That is upside of 19% from today's stock price of $24.93 and suggests that the stock is fairly valued at these levels. This also suggests that the stock has limited upside and should be avoided at its current stock price."
Huh? Too bad SA doesn't filter this trash before publishing.
Chesapeake Energy: A Great Time To Bail? [View article]
This is making their income look much rosier than it is. The balance that is capitalized (~$140 mil per qtr) comes out to ~$0.20 / share. That's pretty significant.
All Chesapeake Bulls Can't Be Right [View article]
All Chesapeake Bulls Can't Be Right [View article]
http://bit.ly/GQeKLw
EXCO Resources: A Highly Leveraged Bet On A Natural Gas Price Rebound [View article]
Sub $10 UNG Is Coming To A Market Near You [View article]
Sub $10 UNG Is Coming To A Market Near You [View article]
Buying Ford For Income [View article]
Google Stock Dividend: Why 1 + 1 Will Not Equal 2 [View article]
You pretty much described most stocks.
"Why can't the founders just sell Cs and keep Bs?"
From the founders letter: "One thing to keep in mind is that immediately after the Class C dividend, all stockholders, including Larry, Sergey and Eric, will retain the same voting interest they hold prior to the dividend. In addition, Larry, Sergey and Eric have agreed to subject their shares to a Transfer Restriction Agreement. This agreement will maintain the same link between their voting and economic interests that exists today, even if they sell some of their non-voting Class C shares. If the founders or Eric wish to sell or transfer their non-voting Class C shares, a “stapling” provision in the agreement requires them to either sell an equal number of Class B shares, or convert an equal number of Class B shares into Class A shares. No other stockholders will be subject to these restrictions upon the transfer or sale of their shares. The stapling requirement will terminate as to the founders when their collective ownership falls below a certain threshold, and as to Eric when his ownership falls below a certain threshold. Further details of the Transfer Restriction Agreement will be included in our proxy, but it’s important to note that the stapling provision is designed so that, subject to the thresholds, the votes held by the founders and Eric will be reduced proportionally as their economic interest in the company declines."
That solves the issue of selling the Cs and keeping the Bs.
"The company could have simply done a 2 for 1 split and issued more shares of GOOG. Their control would have remained unchanged."
That doesn't even make sense unless you are saying that you think that google should have issued more shares and given them to the founders. If the company issued A stock into the market, that would dilute their control. This split is being done because the founders control is being diluted as they convert B shares to A shares and as they continue to issue shares for employee compensation.
Google Stock Dividend: Why 1 + 1 Will Not Equal 2 [View article]
I highly doubt they will trade at the high differential you say they will. Both represent the same equity in Google while one has pretty much useless voting rights. Any discount in the C shares should get bought up.
With regards to a big insider sale coming up, why? Both founders have sold a ton of stock lately. Why do they want to sell more after they announced this plan? If they want to sell C stock they have to also sell B or convert equal amounts of B to A. That basically undermines their plan for control, so why would they dump a bunch of C shares soon? Doesn't make sense.
Google's Split: A Potential Mess In The Options Market [View article]
10-Year U.S. Treasury Is Heading For 6% [View article]
Average US debt maturity is 5 years. Current average interest rate on bills is 0.078% and notes is 2.154%. Bumping the 10 year to 6% is pretty much a disaster when you consider interest expense is already well over $400B/yr.
U.S. Fed Funds Signaling Impending Interest Rate Rise [View article]
Trading Weekly Options With The SPDR Gold Trust And Others [View article]
Commissions are huge on these and getting filled is not the easiest thing. Seems to me like unless you get a huge movement past your spreads, that you have to either close out for a small loss or gamble and hold to expiration.
GLD was at 162.50 earlier today and my RIC was just break even. Depending on how you skew your RIC contributes alot to the ability to take profits early. Which side most of the premium comes from makes a big difference. 0.24 of my premium came from the puts and 0.36 of it came from the calls.If GLD moves towards the smaller premium, you are naturally in a hole since you are losing more on the calls trade than gaining on the puts. I skewed mine closer on the upside after that big down day last week, you went more skewed to downside.
Yelp Shares Pop; Valued at $1.3 Billion [View article]
Chesapeake Energy: Worth A Shot Despite Low Natural Gas Prices [View article]
"That is upside of 19% from today's stock price of $24.93 and suggests that the stock is fairly valued at these levels. This also suggests that the stock has limited upside and should be avoided at its current stock price."
Huh? Too bad SA doesn't filter this trash before publishing.