m22au's journal

Quote from m22au:

Four more short ideas:

AMD HPQ LXK DELL

All four of these relate to the theme of PC growth slowing, and tablet / smartphone use taking some of their market share of the wider "computing market".
More...

Oops I should have listened to my own advice and actually shorted those stocks yesterday when I wrote about them.

AMD -4%
DELL -4%
HPQ -11%

H-P stock hits 9-year low, down 11%

http://www.marketwatch.com/story/h-p-stock-hits-9-year-low-down-11-2012-10-03

HP CEO warns company's earnings will fall in 2013

http://finance.yahoo.com/news/hp-ceo-warns-companys-earnings-162454706.html

SAN FRANCISCO (AP) -- Hewlett-Packard Co. is expecting earnings to fall by more than 10 percent next year as CEO Meg Whitman struggles to fix a wide range of problems in a weakening economy.

Whitman delivered the disappointing forecast Wednesday at a meeting that the ailing Silicon Valley pioneer held for analysts and investors.
 
As at 31 July 2012
3,000,378,919 shares outstanding
http://www.sec.gov/Archives/edgar/data/101830/000010183012000089/sprintq2201210-q.htm


Acquisition Announcement
http://finance.yahoo.com/news/softbank-acquire-70-stake-sprint-082300110.html

Transaction Terms

NEW:
3.1 billion USD convert into Sprint common stock at $5.25 per share. To become wholly-owned subsidiary of New Sprint.

AND:
17 billion USD

of which:
NEW 4.9 billion USD
newly issued shares of New Sprint at $5.25

12.1 billion USD
55% of current ("old" Sprint) shares outstanding
works out to be $7.30 per Sprint share

The other 45% of current ("old" Sprint) shares will become shares of New Sprint.

"SOFTBANK CORP. (“SoftBank”) (TSE:9984) and Sprint Nextel Corporation (“Sprint”) (S) today announced that they have entered into a series of definitive agreements under which SoftBank will invest $20.1 billion in Sprint, consisting of $12.1 billion to be distributed to Sprint stockholders and $8.0 billion of new capital to strengthen Sprint’s balance sheet.

"Through this transaction, approximately 55% of current Sprint shares will be exchanged for $7.30 per share in cash, and the remaining shares will convert into shares of a new publicly traded entity, New Sprint. Following closing, SoftBank will own approximately 70% and Sprint equity holders will own approximately 30% of the shares of New Sprint on a fully-diluted basis. "

***

The $20.1 billion figure is equal to:

$12.1 billion purchase of (some) existing Sprint shares at $7.30 cash

plus

$3.1 billion convert bond, converts into Sprint at $5.25 per share

plus

$4.9 billion in newly issued shares of New Sprint

***

so in total there are $8 billion in new shares to be issued at $5.25, or about 1.524 billion new shares.

As at 31 July 2012
3,000,378,919 shares outstanding

plus 1,523,809,524 new shares

equals 4,524,188,443 shares in total of New Sprint

if we use $12.1 billion as 55% of Sprint, then $22 billion is equal to 100% of Sprint.

22 (existing) + 8 (new capital) = 30 billion USD for New Sprint

$30 billion / 4.524188443 = $6.63 indicative share price.

Lower price than $6.63 possibly indicates that shareholders concerned they will not get $7.30 cash for all the shares they tender.
 
I'm probably shorting CLWR this morning.

"The transaction does not require Sprint to take any actions involving Clearwire Corporation other than those set forth in agreements Sprint has previously entered into with Clearwire and certain of its shareholders. "

On Friday, I read somewhere (24/7 WallStreet ?) that $2.30 was the most S would pay for CLWR, given its debt burden.
 
Quote from m22au:

In my post last week I listed some short ideas

http://www.elitetrader.com/vb/showthread.php?s=&postid=3639017#post3639017

Under the umbrella of 'base metals to short due to China growth concerns', I included:

Iron ore: Fortescue
Coal: ANR ACI

steel could fall into this as well, one example being AKS
More...

It is more difficult to find a free source for iron ore quotes than it is for other metals.

One possible source is Reuters, using the code

.IO62-CNI=SI

For example, searching Reuters news articles (or Google News) for .IO62-CNI=SI
http://www.reuters.com/search?blob=.IO62-CNI=SI

provides a list of recent news articles about iron ore and steel prices.

Alternatively, this Bloomberg page:
http://www.bloomberg.com/quote/MBIO62DA:IND

lists prices for iron ore
"Iron Ore delivered to Qingdao China - 62% Ferrous Content - USD/dry metric ton"
 
Very bad European car sales numbers today.

On a day when European equities are racing higher.

Sore thumb of the day award goes to Peugeot, down 3% to 5.80 EUR, near the 52-week low of 5.70.

In July there were various articles questioning the company's long-term prosepcts, such as this one:

http://globaleconomicanalysis.blogspot.com.au/2012/07/peugeot-has-51-chance-of-debt-default.html

"Peugeot Has 51% Chance of Debt Default; Hollande Says France Will Not Let Peugeot Lay Off Workers"

It looks like Peugeot and ALU are two French entities keeping each other company as they languish near 52-week lows.
 
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