Jake Berzon

What's Driving Precision Drilling Trust Into the Ground?

On Dec 19 01:40 PM notsosmart wrote:

> another self serving article.too many on this site.i own this stock.

Too few people read this blog for entries within it to be considered self serving. I thank you for being among this elite.

On Dec 19 02:12 PM User 19554 wrote:

> The key question here is why didn't you buy Grey Wolf stock?

The reasons that I did not purchase GW instead are many and complicated. Here they are, breifly:

1. Taxes on the cash portion of the distribution.
2. Discount over buying PDS directly would have only been about 3%.
3. If for some strange reason this deal does not close, GW stock would fall at least 50%.
4. I would need to be sure that the distribution instructions were received by the following day, or seriously risk getting screwed by only receiving PDS shares and not the cash.

On Dec 19 03:33 PM BLITZ wrote:

> Are you sure about the ceo they sometimes do crazy things at buyout time ala
> KEN FISHER @bank Of America, time warner-aol to name a couple.

I guess, you can never be sure, but I did get myself somewhat familiar with this fellow. He appeared to be very apt and a straight shooter, which is what you want under such circumstances. I didn’t get the connection between Ken and either Bank of America or AOL Time Warner

On Dec 19 04:15 PM turb0kat wrote:

> I think to say that it is the acquisition which torpedoed this stock
> misses the truth: the stock torpedoed because of the convergence
> of (a) impending payments on debt (b) expected slash in dividend
> (c) $100 drop in oil prices.

You are absolutely right – many factors are sinking this stock and some of these are macro. I was simply trying to say that PDS would be trading much higher, if it was not for factors tied to the GW acquisition.

On Dec 19 05:02 PM NanooGeek wrote:

> PDS recently announced an "in-kind" distribution, 'xplained as truing
> up the shares, or somesuch... which is likely to have tax consequences
> for ALL unitholders.

This is a very good point and you are absolutely right. They do these organizational distributions every year, as I recall, and those of us in the US who buy PDS, instead of the PD.UN on the Toronto Exchange get a little screwed by paying taxes to Canada for nothing. On the bright side though, these taxes are tiny and are also deductible on your US return.