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Sep. 2, 2015, 3:23 PM
- Volatility in U.S. coal equities (NYSEARCA:KOL) has reached the highest level since March 2010, as miners that fell more than 90% jumped to a two-week rally that abruptly ended yesterday when they slid as part of the stock market's wider selloff.
- Short sellers are a big factor: Last week's bounce suggests short sellers were fleeing their positions, which pushed up prices - Peabody Energy (BTU -3.6%), for example, had averaged ~15M trades/day for a month before Thursday, when it totaled nearly 60M.
- The companies also are trying to restructure their debt: After reports said Arch Coal (ACI +6.8%) was looking to compromise with lenders opposed to its proposed debt swap, and thus stave off the threat of bankruptcy, shares soared 633% in nine trading days.
- But Bloomberg says ACI is having trouble completing the swap, with senior lenders still opposed, and bond traders do not think the deal would be enough to fend off a bankruptcy.
- Also: CLD +1.3%, WLB +3%, ARLP -2.2%.
Sep. 1, 2015, 3:39 PM
- Coal stocks (KOL -4.4%) are surrendering large chunks of their recent gains, as might be expected, but J.P. Morgan analysts think coal's share of the U.S. power market might have hit its low point, seeing grid inflexibility making a reduction in coal’s share below ~30% difficult without more investment in the grid, pipelines and more gas power plants.
- The JPM team thinks it is reasonable to assume that once the U.S. gas market begins to balance and the gas price picks up, coal’s market share will recover to the mid or even high 30s prior to the introduction of the greenhouse gas rule, assuming the rule overcomes its many legal challenges.
- Meanwhile, the firm cuts its 2016 EPS estimate on Alliance Resource Partners (ARLP -1.7%) to $0.83 from $0.89, and imitates a 2016 estimate on Peabody Energy (BTU -17.98%) for a loss of $0.37, Arch Coal (ACI -28.9%) for a loss of $6.78, and Cloud Peak Energy (CLD -22.1%) for a loss of $0.21.
Sep. 1, 2015, 12:46 PM
Aug. 31, 2015, 11:36 AM
- Coal companies (NYSEARCA:KOL) continue their apparent short-covering rally, even as J.P. Morgan cuts its coal price forecasts, expecting excess production capacity built in recent years to keep downward pressure on prices in a mirror image of the late 2000s when capacity shortages drove prices higher.
- Even where capacity is forced to pause, much of it could be brought back quickly, which is acting as an overhang, the firm says.
- Arch Coal (ACI +19%) leads the gainers after extending its debt exchange through Sept. 23; the swaps originally had been scheduled to expire on Aug. 14 and then were extended through last Aug. 28.
- Also: BTU +8.8%, CLD +6.4%, WLB +3.1%.
Aug. 28, 2015, 9:17 AM
Aug. 27, 2015, 12:47 PM
Aug. 27, 2015, 9:14 AM
Aug. 26, 2015, 2:09 PM
- Peabody Energy (BTU -7.2%) has hired Lazard to advise the company how to restructure its $6.3B of debt, Bloomberg reports.
- BTU, which is suffering from a collapse in demand for coal, is said to be talking to creditors about ways to cut its debt load, including swapping obligations for new shares or convertible notes.
- Several coal miners have filed for bankruptcy this year including Alpha Natural Resources, Walter Energy and Patriot Coal, as the price of coal used in steelmaking has dropped 72% since April 2011.
Aug. 26, 2015, 9:14 AM
Aug. 25, 2015, 9:19 AM| Aug. 25, 2015, 9:19 AM | 7 Comments
Aug. 24, 2015, 9:19 AM
- Gainers: GAS +29%.
- Losers: VTL -79%. ACI -31%. BZUN -25%. WBAI -23%. JMEI -20%. BTU -17%. MDR -17%. CSIQ -17%. VIPS -16%. FIT -16%. SFUN -15%. LC -15%. PLUG -15%. EXXI -15%. QIHU -14%. MACK -14%. ACHN -14%. KNDI -13%. CYBR -13%. OHGI -13%. Z -13%. TCK -13%. JKS -13%. AVEO -12%. OAS -12%. WLL -12%. MCUR -12%.
Aug. 21, 2015, 9:15 AM
Aug. 20, 2015, 2:54 PM
- Soros Fund Management disclosed minuscule (for Soros) stakes in Peabody Energy (BTU +24.6%) and Arch Coal (ACI +42.1%) at the end of last week. Combined, the Peabody holding of 1.03M shares and Arch holding of 533K shares amounted to less than $2.5M versus AUM north of $20B.
- The tiny stakes in the two near-bankrupt coal producers could be thought of as a lottery ticket, or maybe it's just The Palindrome - well known for railing against coal as it pertains to climate change - tweaking his political enemies.
- The stocks of both companies didn't do a whole lot for two sessions after the disclosure, but soared yesterday as Arch Coal was reported on working out a debt swap compromise with its creditors.
- News China could be producing a whole lot less in the way of carbon emissions than previously thought could be sending the two flying higher again today.
- CLD +3.9%, WLB +1.4%, RNO -2.15%, CNX -0.8%, KOL flat
Aug. 20, 2015, 12:45 PM
Aug. 20, 2015, 9:14 AM
Aug. 19, 2015, 12:45 PM
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