Edward Schwartz

Long/short equity
Edward Schwartz
Long/short equity
Contributor since: 2012
Best stock for next 30 year $DMRC
was addressed to author of article.
You give SHZM a $1B market cap. Since much of their technology is licensed from $DMRC, what valuation would your give $DMRC?
Even though this article was published in 2010 by the U of Maryland School of Journalism, I think it may be very relevant, especially the comments about Street Sweeper and one of it's principals, Howard Adams. http://bit.ly/1A6eVsu
I urge all to read Judge Nathan's ruling published yesterday on Pacer or you can find it for free on RPX http://bit.ly/1IsGV1l. She talks about ISIS and industry standardization. The same things I've written about previously on Seeking Alpha.
Wegman's is first retail customer of Digimarc Discover. Go to Twitter, search "Digimarc", you'll see photo of DMRC's booth at National Retail Trade Show.
Buyers held back purchase orders until after the Apple NFC announcement. OTI does not sell "off the shelf" goods, so there can be 6-9 month delays until goods are shipped. From the CEO's comments on the conference call (Q3 2014), company is seeing interest in larger size orders.
Wave is currently being offered in Hong Kong. You can see a link of one of the banks that started offering it under the name i-PAY.
I believe OTI's break even point is around $30M/year. Anything is possible, and I believe that this stock will move up on earnings and revenue. The real key here is whether OTI's CEO understated guidance and will over deliver financial results. If that's the case, we'll certainly know November 11th when Q3 earnings are announced.
I think that AB Note would be a good starting point. http://bit.ly/1tm2oRb
There is an AB Note contact number at the end of above press release.
The wave can be attached permanently to the cell phone using the external speaker jack. From what I understand, the wave is issued by a bank and encoded with a skewer or barcode number specific to your credit card (as a security caution). With OTI's technology, it's also a secure transaction. The real key here is to develop recurring revenue for every transaction either using the wave or the "043" patent.
Par Petroleum ‘confident’ about Hawaii
Tesoro’s successor faces uphill battle as refiner
Par Petroleum ‘confident’ about Hawaii
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Photo illustration by Ruben Duldulao
Duane Shimogawa
Reporter-Pacific Business News
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It’s one of the most burning questions in Hawaii’s energy scene today: Why would Par Petroleum, a publicly traded, Houston-based energy company buy Hawaii’s largest oil refinery and more than 20 gas stations from Tesoro Corp. when that company called Hawaii a drag on its earnings and the Aloha State has a goal to wean itself from fossil fuels?
On top of that, a scathing preliminary report issued last month by the Hawaii Refinery Task Force said that one, or both, of Hawaii’s refineries are likely to close by 2020 due to the daunting challenges that Par Petroleum and Chevron Hawaii will face as demand goes south and the state’s thirst for cleaner sources of energy intensifies.
And then there are the ever-tightening environmental regulations that a refiner of petroleum has to comply with.
Until now, Par Petroleum Corp., which formed Hawaii Independent Energy to run its Hawaii refinery, has been fairly quiet about its Hawaii strategy. But, in an exclusive interview with PBN, Hawaii Independent Energy executives, including CEO Bill Haywood, discussed why the company bought Tesoro Hawaii’s operation and what it hopes to accomplish here.
Haywood, a former Tesoro executive in California, is confident that Par Petroleum will be here for the long term, reasoning that Hawaii is and will continue to be heavily dependent on imported crude oil for the foreseeable future.
Nearly 90 percent of Hawaii’s energy still comes from fossil fuels, and having on-island refining capacity mitigates some of the state’s energy security risk, company executives said.
Additionally, they say that although the popularity of renewable energy is increasing in the state as a result of the Hawaii Clean Energy Initiative, the development of these alternative forms of energy has not yet reached a scale that will come close to allowing any of them to cost effectively displace fossil fuels.
And, besides Hawaii’s own energy needs, Hawaii Independent Energy executives say that its 94,000-barrel-per-day refinery in Kapolei is well configured to meet the needs for jet fuel for the international market.
“On-island refining is greatly needed here,” Hawaii Independent Energy Spokesman Lance Tanaka told PBN. “We really like to tout that we have a really robust distribution system throughout the Islands.”
At the same time, Haywood recognizes that oil refining and distribution in Hawaii is a tough business.
“You have to know what you’re doing,” he told PBN. “We’re confident we will be here. The investments we made [show that]. We plan on being here for a long time.”
Haywood said the company is in the process of hiring as many as 40 employees in fields as diverse as engineering, maintenance and accounting.
Currently, Hawaii Independent Energy employs about 500 people, including 200 workers at its plant in the Campbell Industrial Park.
Besides its refinery, storage and import terminal assets, Hawaii Independent Energy also owns 28 retail gas stations, and three other locations are owned by independent dealers that still carry the Tesoro brand.
“We want to keep our existing system and maximize it,” Haywood said. “If there are opportunities to grow, we would look into it.”
Mark Glick, head of the Hawaii Energy Office, says the state can’t forget about its conventional fuel base.
“When you look at how we have really addressed all of our major [energy] challenges, all of our key stakeholders are working together and have a great commitment to our overall goals and supporting Hawaii’s plans for energy transformation,” he told PBN.
Glick says Hawaii Independent Energy seems to be interested in working with other local players.
“We will see over time,” he said. “We want to insure from the smallest retailer to the largest player that we have continuity and fair pricing, and avoid any price-and-supply disruptions. We still haven’t been faced with that circumstance of [a refinery] shutting down.”
Jeff Mikulina, executive director of the Honolulu-based renewable energy nonprofit Blue Planet Foundation, says that of the two refineries in Hawaii, the Hawaii Independent Energy facility has the capacity for processing bio-crudes and, therefore, may have the ability to meet new environmental protection regulations at a lower cost.
“But we can’t be sure of the refinery’s future in the near term, [and] a state consultant recently concluded that ‘it is likely that both refineries will close’ based on current and pending pollution rules,” he told PBN in an email. “The consultant also noted that in addition to the pollution issues, ‘both refineries have been under economic pressure stemming from the need to purchase high-cost crude oil, high operating costs due to relatively small refinery size and increasing regulatory impacts on the refining business. At some point, declining demand for power generation and transportation fuels stemming from conservation efforts and the Hawaii Clean Energy Initiative’ will make refining fossil fuels in Hawaii less profitable.”
The Chevron Hawaii refinery, which also is in Kapolei, faces what is at least an equally uncertain future that may include everything from shutting down or selling off to changing its operation in Hawaii, a source told PBN earlier this year.
Chevron could not be reached for comment for this story, but company spokesman Al Cheepreviously told PBN that the market is expected to evolve in the next several years, and the company is assessing its opportunities and asking itself: “How do we continue to position ourselves to be reliable and profitable? We’re still out there committed to do the business and meet the customers’ expectations.”
In terms of selling or operating the facility as a terminal, he said the company looked into these possibilities just a few years ago and decided it should continue doing business as usual.
“At the very bare minimum, we have to be able to operate safely, reliably and be profitable,” Chee said. “We have to be able to achieve those things in order to continue operating out there.”
Asked if Chevron is for sale, he responded by saying that he is not aware of any activity, and he couldn’t say anything if it was.
Chee also said that Chevron is in a wait-and-see mode when it comes to assessing the new owner of Tesoro Hawaii’s operation.
“Whether that owner stands for something else or will do the same thing, we don’t know,” he said.
Meanwhile, the elephant in the room remains the industry’s future viability, at least at the local level.
One theory is that Par Petroleum could turn its operation into a tank farm, which basically brings in finished products.
“That being said, there are things out there that are lower-grade crudes that people are trying to get rid of that’s much cheaper than buying some of these sweeter crudes out of Asia,” one source told PBN. “They may be looking at those options to get their refining costs down. I’m not totally convinced that it’s a dying [industry]. There can be a better business model.”
The source also pointed out that because Par Petroleum is a much leaner company than Tesoro, which has several refineries and much higher overhead, it may find ways to make its operation efficient enough to make it work in Hawaii.
“They don’t have to make much money to be profitable,” the source said. “They seem very knowledgeable on what they want to do and have done that already on the Mainland.”
A source familiar with Par Petroleum has a strong belief in the company’s long-term viability in Hawaii, especially with serial investor and billionaire Sam Zell’s involvement in Par Petroleum.
Zell, who is no stranger to Hawaii companies, also is board chairman of Covanta Energy Corp., which runs the City and County of Honolulu’s waste-to-energy plant called H-Power.
The source thinks that Zell, who is known as a turnaround specialist, will somehow do the same for Hawaii Independent Energy.
“That’s the kind of investment Zell likes — basically getting it for free from desperate sellers,” the source told PBN. “His logistics guy probably came to him and said they could make it work.”
You are correct..."National Exchange" is the exact wording. I assumed Nasdaq, but could be NYSE or AMEX. We'll wait and see.
Also in the filing, PARR is going on the Nasdaq. I think that mutual funds restricted on buying bulletin stocks will follow Zell and Coppelman. Remember, it was Coppelman who took a position in Facebook at $27 (approx), when no one wanted Facebook.
SEC Filings http://bit.ly/1edgJp7;pdf=
On December 2, 2013, the Board approved and recommended an amendment (the “Amendment”) to the Certificate to implement a one for ten reverse stock split such that every holder of the Common Stock shall receive one share of Common Stock for every ten shares of Common Stock held. On December , 2013, the Consenting Stockholders approved the Amendment by written consent. As a result of the Reverse Stock Split, each share of Common Stock outstanding at the effective time of the Reverse Stock Split, will, without any action on the part of the holder thereof, become one-tenth of a share of Common Stock.
If you are referring to the "proposed" reverse split, according to the filing, 1:10.
I completely agree. Those revenue, and hopefully profit #'s, should jar people into looking more closely. And as much as reverse splits can be a result of negative events, this is one of those times it should be a meaningfully positive, For starters, no one likes hearing 300 million shares outstanding. 30 million is a much more institution-friendly number. Many funds and investors can't, or won't invest in bulletin board stocks, so getting this off of there, and making it marginable, will also help the stock rise. Lastly, the fact that Zell and Whitebox can approve and process these kinds of moves without shareholder approval really streamlines the process. they don't have to ask; they just tell us. so getting this reversed and on a new exchange will probably be done in 2-4 weeks at most.
Also, I found the old press release on the reserves... here it is (I was wrong, and understated the high end from memory - it is actually approx. $290 million on the high end):

the company put out a press release shortly after emerging from bankruptcy, citing proven reserves of approximately $85-$250 million. that release is old enough that I can't access it anymore, but it's out there. since then, I haven't seen the reserves specifically addressed in any filings, only references to the acreage and the partnership with Laramie, citing that Par is contractually restricted from discussion the business at the present time.
Thanks for your comment.
1. The $1.50 represents the net present value of the NOL. So while the "gross" amount would be around $4.00, the actual cash benefit to the company that that would represent in tax savings would amount to approximately $1.50/share, presuming the company generates enough net income to tap the $1.3 billion over time.
2. Very good questions. First and foremost, this refinery was essentially orphaned by the parent, Tesoro, long before it was shut down. So you had a business that requires capital expenditures and good management to be successful, and it was severely lacking in both. The crack spread, the primary measure for profitability for this type of business, had compressed from around $24 to zero, and Tesoro jumped ship almost exactly at the bottom. So by the time Par came around, this asset had been written down to zero by the parent company and was shut down. So they basically gave it away for $75 million (plus up to $40 million in potential earn-outs) as a way to get it off their books (at a profit, actually, because it had been written down to zero) and to allow all those workers to retain their jobs. I have spoken to people directly involved at the refinery who tell me that the workers there have been immensely frustrated with Tesoro and everyone is very excited to see the refinery back up and running and to see some hungry, smart people looking to monetize and grow the asset. So the short answer is, $450 million is probably a conservative valuation, but that's what I used until the smoke clears and we can see what the numbers really look like in the next quarter or two. But Zell's nickname ("The Grave Dancer") is perfectly suited here.. he bought a shut down asset a giant parent company didn't want to deal with, and is seeking to capitalize on it as a piece of Par's strategy.
Like you say, and I've said, there will be no scientific valuation at this point. But there is enough value here to make this more than just a prudent speculation.. it is likely also a value play, even at this price, exclusive of future deals to come.

To assign a zero value to a $1.3 billion NOL, and to presume a seller knows more than the buyer who is buying their shares, removes all insight and credibility from your questions.
You say they “aren’t close to being monetized.” The company is successfully drilling many wells, led by their partner, Laramie, which is headed by management that has had tremendous success in the area. But you presume that monetizing the assets is the only way to garner value. Acreage can be sold, and this acreage is getting progressively more valuable. Lastly, it is very common that companies emerging from bankruptcy do so with assets on the books often far below their real value. It’s in the debtors best interest to keep those values as low as possible in the bankruptcy process to get them the largest chunk of the company they can upon emergence.
If ATT's customer service department is an indication of a well run company, then I would not invest in ATT,
Here's an interesting article on OTIV from an Israeli newspaper
(found in middle of this story)
Jerry Ivy has amended his 13D Filing 10/8/12
Additional communication from William Simons indicated that other towns may be involved
"Portsmouth, Manchester, Portland, Concord, Boston.

There is no commitment from any other town at this point, just interest in the program to see if would benefit their system. Each city would do their own evaluation. "
After this article was published, I received the following communication from William Simons:
" Once other towns come on board, it will make the program even better."
It's true...TMobile has opted for a jury trial as per latest filing
No further update...the link reads exactly as I posted in the comment section.
Here's the results from the August 3rd meeting
Attached pleading says parties are to submit a joint case management
plan to the court by 8/10. That is a common order which indicates
that the litigation is going forward, at least at this point. The
parties will agree to various motion and discovery deadlines in the
I think you sell because Harbinger hit my price objection of a 10% discount to NAV. A shelf was also filed a few months ago which would accommodate a secondary of HarbingerCapital Shares. No reason to stick around after a near double.