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Walter Energy -11% premarket on gloomy BofA coal assessment

  • Walter Energy (WLT) -11.4% premarket as BofA/Merrill comes out deeply negative on the coal sector (KOL), expecting depressed fundamentals over the next several years due to oversupply and reluctance to shut capacity.
  • On WLT, the firm fears the company is likely to face liquidity issues and cuts its price target on the shares to $2 from $8 "even assuming what we believe to be a best-case cost scenario."
  • ACI -2.5%, BTU -2.3%, ANR -1.5% premarket.
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Comments (59)
  • omarbradley
    , contributor
    Comments (964) | Send Message
     
    this is rank market manipulation and if the Government knows what's good for it they will look into these ridiculous "market calls." a "2 dollar market call" on a meth coal producing name is truly quite extraordinary...is it because the American people's heating bills went down this winter?

     

    doesn't appear so. so "who is bankrupting a top shelf coal company and why"?
    20 Mar 2014, 08:19 AM Reply Like
  • maudie
    , contributor
    Comments (484) | Send Message
     
    I know Obama's EPA is applauding as is NASA, whatever it now stands for.
    20 Mar 2014, 08:48 AM Reply Like
  • mystical44
    , contributor
    Comments (37) | Send Message
     
    What does Obama have to do with it????
    20 Mar 2014, 09:08 AM Reply Like
  • Mike Maher
    , contributor
    Comments (2828) | Send Message
     
    I didnt know WLT sold meth!
    20 Mar 2014, 09:16 AM Reply Like
  • LetsGoPSU
    , contributor
    Comments (153) | Send Message
     
    Walter doesn't SELL meth, he COOKS meth
    20 Mar 2014, 10:00 AM Reply Like
  • Small Fry
    , contributor
    Comments (351) | Send Message
     
    If Obama is responsible for the plummeting price of coal, that's a good thing. Lower energy prices are good for the economy even if it means that high cost producers go out of business.
    20 Mar 2014, 10:35 AM Reply Like
  • bmedina32Socal.rr.com
    , contributor
    Comments (2) | Send Message
     
    You must be thinking of Walter White.
    20 Mar 2014, 11:09 AM Reply Like
  • benitus
    , contributor
    Comments (2526) | Send Message
     
    mystical.....Obama has been trying to kill the coal industry through the EPA, in his efforts to promote clean energy and alternative or renewable energy. He seems to forget or unwilling to think about the 500,000 people whose livelihoods depend on the coal industry.
    20 Mar 2014, 11:16 AM Reply Like
  • maudie
    , contributor
    Comments (484) | Send Message
     
    To do with what? I wrote that his EPA is applauding. Defensive, much?
    20 Mar 2014, 01:32 PM Reply Like
  • SteveSzabo
    , contributor
    Comments (33) | Send Message
     
    Please remember that NASA started in 1958 in the Eisenhower administration and the the EPA started in 1970 ( for good reason )
    in the Nixon administration.
    20 Mar 2014, 01:41 PM Reply Like
  • wil3714
    , contributor
    Comments (2139) | Send Message
     
    if they sold meth they might actually get in the black this year
    21 Mar 2014, 02:08 AM Reply Like
  • benitus
    , contributor
    Comments (2526) | Send Message
     
    Steve....if I get you correctly, EPA is not the enemy but it's the admin who're using them to make enemies with industries.
    22 Mar 2014, 08:00 PM Reply Like
  • justaminute
    , contributor
    Comments (1106) | Send Message
     
    Unfortunately, the EPA like many departments in the government including the DOJ, is packed with like-minded people who, by virtue of the federal employees union, are virtually impossible to get rid of once a new administration comes into office. So the radical leaning, unelected bureaucrats with political agendas that become entrenched in positions of non-congressional rule\law making is the real problem.
    23 Mar 2014, 02:17 PM Reply Like
  • benitus
    , contributor
    Comments (2526) | Send Message
     
    justaminute.....it's sad but true. Two terms of a liberal admin has put paid to any thought of getting a fair shake with the EPA. If we win Congress this year, then the fight to shackle the EPA can begin in earnest.
    23 Mar 2014, 08:46 PM Reply Like
  • 11137741
    , contributor
    Comments (235) | Send Message
     
    You don't consider Fracking a loose business. Look at how Pennsylvania moved on it. Just shutting down whole towns and paying people to move because the water is ruined. How many years will that be uninhabitable ?

     

    It amazes me that things like this just walk through us, then years later we complain about it, go after the companies and slap on the wrist. Only ones that suffer are the original land owners.

     

    Super fund sites are still there. But the time fracking is outlawed the rich will be much richer, then the gov't will pay billions to clean it up.

     

    No one can tell me that pumping chemicals into the ground is safe. It isn't a REAL BIG problem, "YET" but they will push harder and harder to scape every last gallon, then stuff will slowly seep... All of a sudden 5 years after there gone, the problems start...

     

    Anyway, I am not too liberal, anymore, this is just the truth. I live with it and know it happens. I work around it in my own life because like everyone else, can't do a damn thing...
    24 Mar 2014, 11:35 AM Reply Like
  • 11137741
    , contributor
    Comments (235) | Send Message
     
    Do you think it is Obama as much as it T Boon Pickins and the other Gas companies ? THey are getting rich off of gas right now. Soon to be priced to high, then Coal comes back... Curious to see what the bench mark will be for the second quarter, if not out already and I missed it...

     

    And to think it was 330 3 years ago...
    24 Mar 2014, 11:41 AM Reply Like
  • geodan85
    , contributor
    Comments (180) | Send Message
     
    This call sounds late. It also interesting to see a bulge bracket firm talk about a price target ~80% lower and potential liquidity problems. I guess the investment banking area won't be pleased when pitching any deal to Walters to raise funds or advise on mergers/acquisitions.
    20 Mar 2014, 08:56 AM Reply Like
  • 20884111
    , contributor
    Comments (6) | Send Message
     
    18,000 March $8 puts were about to expire worthless tomorrow without this ridiculous note, we now know who owns them!
    20 Mar 2014, 10:26 AM Reply Like
  • Oceanstats
    , contributor
    Comments (65) | Send Message
     
    Bingo!!! Now that's fraud!!!
    20 Mar 2014, 11:03 AM Reply Like
  • Oceanstats
    , contributor
    Comments (65) | Send Message
     
    The gov't police itself? Surely not this Administration where every investigation is deemed phony. BO said he would crush the conservative coal industry with this fist in 2008. Just making good on his promise the last two years. China has been making bids on many coal companies recently so I would start there. ACI has been liquidating assets and mines for the past 9 months like crazy. Burning through $100M a month last 4-5 months. They have a cap of $925M. You do the math. They are going to need a lot of help (not by way of this gov't) to stay afloat if they want to make it to the next election. Peabody can absorb this onslaught for now but they need to be aggressive now and position themselves as the only place to go for coal energy here in the States.
    20 Mar 2014, 09:04 AM Reply Like
  • Small Fry
    , contributor
    Comments (351) | Send Message
     
    The plummeting price of coal is the result of the "mine, baby, mine" mentality. Coal isn't going down in price due to Obama but if it was, we should be thanking him for lower energy prices.
    20 Mar 2014, 10:37 AM Reply Like
  • sabresfan21
    , contributor
    Comments (177) | Send Message
     
    Apparently Obama is powerful enough to tell the Chinese to curb their consumtion of coal. The fact that you can't see your own hand in front of your face in a lot of populated Chinese cities has nothing to do with it.
    20 Mar 2014, 10:51 AM Reply Like
  • mystical44
    , contributor
    Comments (37) | Send Message
     
    Again what does Obama have to do with this??? If this were the case, BTU wouldn't have been impacted as much since they are in Australia...

     

    You obviously dont get supply and demand... Econ101..?? or did you even go to college??

     

    We always want to blame Obama for what we perceive to be bad and not thank him for the record breaking markets many have made a lot of money on...
    20 Mar 2014, 09:12 AM Reply Like
  • MoMoInvestor
    , contributor
    Comments (128) | Send Message
     
    The Obama admin has been discouraging the use of coal (subsidizing other industries - alternative energy, anyone ?) thereby affecting the "demand" side of the equation... whether it is justified or not, the fact is the Obama admin has quite a bit to do with the coal companies suffering.
    20 Mar 2014, 09:19 AM Reply Like
  • mystical44
    , contributor
    Comments (37) | Send Message
     
    Explain BTU then.. .Obama cant tell the whole world to stop using coal.

     

    I dont understand your argument...
    20 Mar 2014, 09:28 AM Reply Like
  • Mike Maher
    , contributor
    Comments (2828) | Send Message
     
    Coal prices are down globally, and US coal is more expensive in most of Asia than coal from that region.

     

    http://on.wsj.com/1fJJmcf

     

    The EPA isnt helping, and the subsidizing of wind power is affecting power prices, especially in the MISO, but the coal companies are suffering as much from economics as they are from unfavorable policy.
    20 Mar 2014, 09:56 AM Reply Like
  • mystical44
    , contributor
    Comments (37) | Send Message
     
    "Coal prices are down globally"

     

    Thanks for validating my point that Obama is not the one to blame here and doing so just shows ignorance or racism.
    20 Mar 2014, 10:00 AM Reply Like
  • MoMoInvestor
    , contributor
    Comments (128) | Send Message
     
    I'm not saying the Obama admin is 100% the cause of what is happening in coal... simply that they are a significant factor... I don't know anything about BTU as a company to comment on them...

     

    Google "Obama Administration Coal Policy"... plenty to read... the admin will tell you straight out that they feel coal is dirty and they are attempting to fight climate change... therefore policy is to discourage the use of coal unless and until it can be burned more cleanly.

     

    http://bit.ly/1kLNcXU

     

    To suggest that Obama has had no impact on the industry and to call everyone an Obama hater if they disagree is simply ridiculous.
    20 Mar 2014, 10:17 AM Reply Like
  • mystical44
    , contributor
    Comments (37) | Send Message
     
    You are simply focusing on Obama for whatever reason and neglecting or ignoring the global coal slowdown issue...

     

    Coal demand is down... period... supply is up... China is using less along with many other traditional consumers..

     

    Yet we keep talking about Obama...sounds like i am reading Fox News or watching Rush Limnutz
    20 Mar 2014, 10:24 AM Reply Like
  • MoMoInvestor
    , contributor
    Comments (128) | Send Message
     
    No, I am not simply focusing on Obama... others may believe that Obama is to blame for everything bad in the world but I am not one...you made a statement that I thought was not accurate and I disagreed... simple as that... no name calling, no bs... if everyone would simply focus on the easily attainable facts - at least so in this case - we could avoid name calling and attacking the messenger.
    20 Mar 2014, 10:33 AM Reply Like
  • Small Fry
    , contributor
    Comments (351) | Send Message
     
    Obama is not a significant factor. Lack of demand isn't the reason for lower coal prices. It's excess supply from "mine, baby, mine". This is true for thermal coal, met coal, and iron ore. Where lack of demand growth is a factor is slowing demand growth in China.
    20 Mar 2014, 10:39 AM Reply Like
  • MoMoInvestor
    , contributor
    Comments (128) | Send Message
     
    That is your opinion and you are certainly entitled to it... but again, google "obama administration coal policy" and you will be treated to a long list of 'experts' who will disagree about whether the admin's policy is "significant"... the factors you suggest may be even more significant... I certainly don't feel the need to argue otherwise...
    20 Mar 2014, 10:45 AM Reply Like
  • maudie
    , contributor
    Comments (484) | Send Message
     
    Who's economics?
    20 Mar 2014, 12:10 PM Reply Like
  • bmedina32Socal.rr.com
    , contributor
    Comments (2) | Send Message
     
    Are you really sserious? The race card? My goodness! One event can effect prices globally, ding dong. Think about the sub-prime mortgage bubble. You have to admit that our local issue had an effect on virtually the entire global economy. And the current administration has a war on coal which puts downward pressure on demand of a global commodity, period. I don't care what color the man is, he doesn't like the coal industry period.
    20 Mar 2014, 01:25 PM Reply Like
  • mystical44
    , contributor
    Comments (37) | Send Message
     
    So you are saying that because Obama wants to lessen our dependence on fossil fuel, China now wants to slowdown their consumption as well, along with the rest of the world?

     

    And i dont think you can compare financial leveraging to global cheap energy needs...poor comparison

     

    As far as the race card, i cant think of any other reason folks love to blame Obama for everything. The man has helped all of you whether you want to admit that or not...

     

    Obama may have a slight impact on the global coal market but enough to dictate global demand and need for cheap energy
    20 Mar 2014, 01:44 PM Reply Like
  • Jrookie
    , contributor
    Comments (76) | Send Message
     
    Amazing you can always tell a liberal (educated elitist) they always play the race card... to divert the truth of Obama adm policies.
    20 Mar 2014, 02:50 PM Reply Like
  • chipster71
    , contributor
    Comments (25) | Send Message
     
    Well, the president of the United States does have the powers of the executive branch at his authority. He is the embodiment of the actions of the United States, he has authority to start a war, he gets on TV once a week to discuss his ideas.
    21 Mar 2014, 08:49 AM Reply Like
  • wallstreetaudit.com
    , contributor
    Comments (3) | Send Message
     
    Agree with you. Bravo
    20 Mar 2014, 09:21 AM Reply Like
  • 11137741
    , contributor
    Comments (235) | Send Message
     
    He is just more interested in Bashing a Dem. regardless of what happens. His point is that coal makes smoke and every Dem. in the world is a tree hugger, thus Obama is and they want to shut every Coal company down no matter what happens... It is ridiculous to think this... Yet ,again, he probably got it from Rush... He is a listener and follower, just like all of Germany during the 30s.

     

    Then when him and his cronies are killing off the Jews, Blacks, and Dems. he would be the first to say... Wait a minute, i didn't think we were going to go this far...

     

    Pathetic.... Find the middle Maude !
    20 Mar 2014, 09:27 AM Reply Like
  • chipster71
    , contributor
    Comments (25) | Send Message
     
    Really, calling someone a nazi? You lack all credibility.
    21 Mar 2014, 08:50 AM Reply Like
  • 11137741
    , contributor
    Comments (235) | Send Message
     
    Comparing followers...
    21 Mar 2014, 09:27 AM Reply Like
  • chipster71
    , contributor
    Comments (25) | Send Message
     
    Are you saying the ends justify the means?
    21 Mar 2014, 10:16 AM Reply Like
  • vireoman
    , contributor
    Comments (1121) | Send Message
     
    The govt is *finally* making BABY STEPS in the direction of addressing global warming through funding renewable energy and trying to wean the country off coal. BABY STEPS that won't do nearly enough to change the future for the next generations. And that is still far too much for some among us to handle. No wonder we're screwed.
    20 Mar 2014, 09:37 AM Reply Like
  • ace70078
    , contributor
    Comments (46) | Send Message
     
    No, this kind of thinking is exactly WHY we're screwed (in addition to other, unrelated reasons)
    20 Mar 2014, 09:42 AM Reply Like
  • MoMoInvestor
    , contributor
    Comments (128) | Send Message
     
    It should be clear, however, that Obama supporters can't have it both ways - you can't admit to "addressing global warming" then turn around and say that the administration is not impacting what is happening in coal...

     

    I'm not suggesting that a clean environment isn't important or isn't justification for limiting the use of coal... but we can't pretend there aren't consequences for our policies for which we should take responsibility.
    20 Mar 2014, 10:24 AM Reply Like
  • 20884111
    , contributor
    Comments (6) | Send Message
     
    18,000 March $8 puts were about to expire worthless tomorrow, coincidence?
    20 Mar 2014, 10:27 AM Reply Like
  • lecso
    , contributor
    Comments (87) | Send Message
     
    Great point...
    20 Mar 2014, 10:30 AM Reply Like
  • SteveSzabo
    , contributor
    Comments (33) | Send Message
     
    Fossil fuels still get more subsidies than clean energy initiatives. Coal is more expensive that wind and now solar. Austin Energy just cut a deal with Sun Edison for 5 cents per kWh. We pay our provider that is 80% coal based 7 cents per kWh.
    20 Mar 2014, 10:27 AM Reply Like
  • tiger8896
    , contributor
    Comments (667) | Send Message
     
    I agree with BAC about the long term gloomy prospects of the coal sector but this haircut of WLT is excessive when Moody's just rated the outlook of WLT as stable yesterday on the issuance of the new debt. They have plenty of liquidity to stave off a BK in the near term.
    20 Mar 2014, 10:36 AM Reply Like
  • 20884111
    , contributor
    Comments (6) | Send Message
     
    Pure market manipulation at its best by BofA/Merrill! What a joke, a $2 PT on a company with a $12-$15 book value? What a shocker this note comes out the day before options expiration. We now know who owns the 18,000 $8 March calls that were about to expire worthless tomorrow without this pile of B.S.
    20 Mar 2014, 11:13 AM Reply Like
  • 20884111
    , contributor
    Comments (6) | Send Message
     
    18,000 $8 March puts, my mistake
    20 Mar 2014, 01:26 PM Reply Like
  • benitus
    , contributor
    Comments (2526) | Send Message
     
    Now is THE TIME to load up on WLT, people, because BOA/Merrill knows nothing about the coal market. China is set to ramp up its construction because the economy has turned soft too fast for their comfort, from the harsh measures that were introduced since January, so demand for met coal will ramp up and prices will improve with increasing demand. Live long and prosper.
    20 Mar 2014, 11:26 AM Reply Like
  • justaminute
    , contributor
    Comments (1106) | Send Message
     
    I thought yesterday was the time to "load up" on WLT. Thanks, bit I'll pass on that advice for now.
    21 Mar 2014, 12:14 AM Reply Like
  • benitus
    , contributor
    Comments (2526) | Send Message
     
    just....I hope you're not jerking my chain and not being sarcastic. The fact that WLT has dropped so much and so fast, on the basis of a stupid report (which is often to serve their own purposes), is the opportunity to load up on the stock, because rebound it will, whether it's now or later. Of course, the fear of WLT's debts driving it into bankruptcy is always there but I believe that it's not going to be in the near future, even if their situation worsens. Beyond that, I can't say more, lest I'm ridiculed further, for sharing my convictions. Peace be with you.
    21 Mar 2014, 01:39 AM Reply Like
  • justaminute
    , contributor
    Comments (1106) | Send Message
     
    I don't think now is the time to buy is all I'm saying. The WLT fans have been saying back up the truck for a while and I think the turmoil is not done.
    21 Mar 2014, 10:09 PM Reply Like
  • Yorick
    , contributor
    Comments (602) | Send Message
     
    $3-4 Nat Gas and the fracking "revolution" to come is killing coal. The law of diminishing returns will eventually hit the gas companies but not before enough power plants convert and make all the but the most profitable mines worthless. China is retrenching, steel and copper are plummeting and you can stick you head in the sand but almost every coal company will continue to shut down production, lay off miners, until their debt load is unbalanced with revenue and income. Following Patriot Coal into cleaning off the balance sheets is what will happen in the next 24 months. In the long run it will be healthy but in the meantime, coal is the mother of all falling knives.
    20 Mar 2014, 11:40 AM Reply Like
  • Bailout2009
    , contributor
    Comments (253) | Send Message
     
    Like I said earlier...they will be bankrupt and picked up in pieces. Who cares what kind of assets you have when the value of those assets is based on a falling commodity price and you have a huge debt load. Its crazy that management thinks rolling over cheaper debt to more expensive debt (and paying huge fees to do so) is a prudent strategy ....wake the hell up!!!! its a slow death.
    20 Mar 2014, 01:45 PM Reply Like
  • justaminute
    , contributor
    Comments (1106) | Send Message
     
    Private equity firms will be buying these companies for 5 cents on the dollar and the management will be thrilled to get out. You won't see this administration bailout the coal industry like they did the auto industry.
    21 Mar 2014, 12:16 AM Reply Like
  • Brandond
    , contributor
    Comments (425) | Send Message
     
    Funny, Morgan Stanley issues note today with $27 target; I can guarantee you that BoA's $2 target was largely driven by the fact that they were the only big bank not invited to participate in the debt offering. Stock for the brave and I don't believe the $2 target nor am I fully on board with $27. At $14, it's a double from here so one more washout and I'll buy.

     

    http://bit.ly/1ilDMRS
    21 Mar 2014, 08:47 AM Reply Like
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