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Kurt B. Feierabend

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    Update...mostly for myself so I'll have a record in case there are any positive changes convincing me to seriously look into investing in National Bank of Greece. I don't like the situation enough right now to invest. Sorry, Jchhiminey, for taking up your blog.

    NBG's right's offering went through with private investors getting 10.8% ownership and the Hellenic Financial Stability Fund will pick up the tab for the remaining 89.2%. Private investors didn't invest for the full 12% but reached the 10% threshold to avoid state control. That would put the warrants that HFSF may issue to the 10.8% shareholders at 8.26 warrants per share owned.

    There was a good article on which gave the mechanics of how the HFSF deals will work with the Greek banks. It says in general, "Warrants can be exercised biannually over the next 4.5 years. The exercise price of each warrant is set to be equal to the offer price of new share, with an interest rate of 3% plus a spread increasing by 100 bps per annum."

    So the exercise price being the offer price (4.29 euros for NBG) plus interest (3% annually to start according to the .pdf) was a good guess on my part.

    My personal feeling regarding NBG at this point is that the equation is, 'insolvent' plus 'cash from recapitalization' equals a value of something less than that cash from recapitalization. The deluge of warrants may be worth something, courtesy of HFSF who is offering that value while absorbing risk to the downside, but I don't think the shares will be credibly worth the 4.29 euros (about $5.62 at current exchange rates) anywhere in the near term.
    Jun 21 09:02 PM | Likes Like |Link to Comment
    Let me retract my past comment regarding the 7.33 figure. That 7.33 figure might be the same for National Bank of Greece as it was for Alphabank if 12% of the newly issued NBG shares are purchased by private investors. The number isn't in NBG's SEC filings but the Hellenic Financial Stability Fund may issue warrants for the acquisition of HFSF's shares at that ratio. The math would work out for 12% that way.

    NBG started with 122,660,120 common shares and will issue 2,274,125,874 more to raise 9.76 billion euros (4.29 euros each). The HFSF picks up most but NBG wants private investors to buy 12% of the new shares to avoid ceding control to HFSF. Because of this, NBG's shareholders received the right to buy, at $4.29 euros each, 2.225 of the new shares for every share they owned previously. 122,660,120 X 2.225 is 12% of the new shares. They have until Thursday to exercise that right.

    If private investors invest at least the threshhold of 800 million euros by exercising their rights, HFSF will issue warrants to those participating shareholders giving them the right to acquire additional shares. Presumably that's the way HFSF is going to exit their ownership. If investors reach the 12% then warrants for 7.33 shares * 12% would equal HFSF's 88% stake and would allow HFSF to exit completely. If investors don't reach that 12% then the number should be higher than 7.33. If investors don't reach threshhold 800 million euros then there won't be any warrants and HFSF will have management control of NBG.

    I don't have any information regarding the price where HFSF has set or will set the strike price of any warrants. It might just be 4.29 euros/share plus interest so they can get their money back.
    Jun 11 10:07 AM | Likes Like |Link to Comment
    I noticed you quoted someone saying, "...shares will receive 7.33 additional shares..."

    That 7.33 number seems to have come from Alpha Bank's recapitalization numbers. It appears that someone mistakenly used Alpha's 7.33 number as National Bank of Greece's number and then that error was copied to numerous sites across the internet.

    The real number seems to be 2.225...and they're not free shares. The pre-emption rights give holders the right to buy 2.225 additional shares at 4.29 euros each. Since today the ADR's closed at $5.03 or 3.78 euros (1 euro = $1.33), there's a strong possibility that shareholders and other investors won't be rushing out to exercise those rights to buy shares at 4.29 euros by the time the rights expire on Thursday (June 13th).

    The Hellenic Financial Stability Fund is putting up most of the money but apparently 10% of the shares need to be owned by other shareholders to keep the bank privatized. I suspect that's in danger now with the share price at $5.03. It's an interesting situation but I don't know if it's worth an investment in the stock, at least not until the dust settles.
    Jun 10 06:27 PM | Likes Like |Link to Comment
  • Box Ships: Rampant Dilution And Insider Transactions [View article]
    You obviously know that Michael Bodouroglou is the CEO of Paragon Shipping. So since you see the self-dealing Mr. Bodouroglou did with Box Ships, why do you say you have a long position in Paragon?? If you can't trust him to do his fiduciary duty for shareholders in one company, do you think he will be any different in another company??
    Aug 23 12:02 PM | Likes Like |Link to Comment
  • John Bordynuik: Revolutionary Company Or Can Of Worms? [View article]
    To Mal Faction:

    The references you're seeking are in the article's links. For example, the $10/bbl statement was at .

    “P2O produces oil at less than $10 per barrel. In the United States, refineries have indicated that they will pick up the fuel at the price of WTI (West Texas Intermediate) price less $3, currently around $70 per barrel.”

    Likewise the reference for the 2,500 sites was in a 2009 article at .

    “So, our plan is to launch 2,500 sites over the next few years.”

    To DebitsandCredits:

    The New York Department of Environmental Conservation is concerned with protecting the environment. They gave JBI a permit to burn pyrolysis off-gasses and emit those to the atmosphere, not a validation saying JBI would be able to make money producing pyrolysis oil.

    Pyrolysis really does break down hydrocarbon material, such as plastic, into flammable liquids and gasses and that's not unique to JBI. You can even find numerous tutorials online on how to convert a car run off of 'wood gas' produced from heating ordinary wood and piping those gasses into the engine. The problem is that pyrolysis is generally not commercially viable. The NYDEC certainly would check to make sure the emissions aren't highly pollutive, but they generally wouldn't verify to make sure that JBI's pyrolysis process is any more commercially viable than any other pyrolysis process. As a parallel to your argument, you could just as well point to a building permit and try to infer that the profitability of a business must be 'validated' otherwise the city wouldn't have allowed the applicant to construct a building.

    To Frank Lind:

    I asked Mr. Stakel at RockTenn very directly, “Can you tell me whether or not Mr. Bordynuik of John Bordynuik, Inc. has broken ground at a RockTenn facility to start building one of his Plastic2Oil plants?”

    The exact response I received from Mr. Stakel was, “As I do not know Mr. Bordynuik or his firm, you will have to ask him.”

    I e-mailed Mr. Stakel again to remind him of his signature on the agreement with Mr. Bordynuik's but he only reiterated that I would have to check with Mr. Bordynuik.
    Jan 14 12:44 PM | 2 Likes Like |Link to Comment
  • INVESTools: Swim And Sink [View article]
    I completely agree with the author this article. I've seen a number of these so called "classes" of companies pretending they have software which can beat the market and I even attended one (TeachMeToTrade). I can give you a number of reasons why the ones I've run across are scams but the bottom line: If the software could make you money (with the 'magic' red/green arrows or whatever) then those companies could make a lot more money actually using the software themselves rather than spending money trying to market it to people who then would arbitrage any such hypothetical advantage out of the market.

    Instead the companies heavily market it and try to 'tier' people into spending even upwards of $20,000 on classes. If, hypothetically again, one of these companies could get even a 5% statistical boost in earnings return from the market by using their own software, you can bet they wouldn't be selling it to anyone.

    What you typically also find is that these types of companies do 'internet maintenance'. Shills go around the internet to places like this blog pretending to be gushing customers and give glowing reviews. I'm not saying that's everyone since there may be some people who are genuinely satisfied or who actually believe the company is getting unfairly badmouthed. The best anyone can really do is take everything with a grain of salt, use common sense and investigate claims where possible.
    Jan 1 12:11 PM | Likes Like |Link to Comment