m22au's journal

[m22au]

Although shorting Peugeot in a free market makes sense, it's important to remember that Governments often interfere with free markets.

This is demonstrated as a distinct possibility in this article:

"Peugeot’s Finance Unit May Get French Government Lifeline"

http://www.bloomberg.com/news/2012-...-funding-options-for-banking-division-1-.html

where Peugeot may receive a bailout, most likely without having to issue equity to the government as part of the process.

 

[m22au]

10-02-12

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".

Initially I thought ALU and Peugeot might be the next "big bankruptcy", but today AMD is becoming a strong candidate.

Down 12% to $2.30 and a market cap of $1.67 billion.

AMD bonds here:
http://cxa.gtm.idmanagedsolutions.com/finra/bondcenter/SearchResult.aspx?q=amd

August 2020 yielding 9.40%
December 2017 yielding 8.98%

 

[m22au]

Alternatively, Navistar NAV

S&P rated CCC+ October 2014 9.34%
S&P rated CCC+ November 2021 9.41%

http://cxa.gtm.idmanagedsolutions.com/finra/bondcenter/SearchResult.aspx?q=nav

stock at new 52-week low $19.29, down 6%
market cap $1.29 billion

 

[m22au]

Quote from m22au:

Alternatively, Navistar NAV

S&P rated CCC+ October 2014 9.34%
S&P rated CCC+ November 2021 9.41%

http://cxa.gtm.idmanagedsolutions.com/finra/bondcenter/SearchResult.aspx?q=nav

stock at new 52-week low $19.29, down 6%
market cap $1.29 billion

Still not sure what the "news" is on NAV, but since I've posted, bondholders have been scared a little more.

October 2014 10.21%
November 2021 9.57%

NAV common stock $19.00 (intraday low $18.47)

 

[m22au]

Quote from m22au:



AMD bonds here:
http://cxa.gtm.idmanagedsolutions.com/finra/bondcenter/SearchResult.aspx?q=amd

August 2020 yielding 9.40%
December 2017 yielding 8.98%

Same for AMD with bonds quite a bit softer:

December 2017 9.62%
August 2020 9.94%

S&P rated BB-
Moodys Ba3
Fitch B+

 

[m22au]

http://www.businessweek.com/ap/2012-10-19/pair-of-analysts-cut-advanced-micro-devices-rating

Moodys downgrades AMD to B1

I think this is the S&P equivalent to B-

So not far from the 'triple hooks'

 

[m22au]

RSH reported bad earnings again

RSH May 2019 offered at 59.50
RSH common stock at $2.05, just above its 52-week low of $2.01

 

[m22au]

Interesting article from Paulo Santos about steel:
seekingalpha.com/article/941031-keeping-abreast-of-steel

And a good reference to Bloomberg quotes and charts for steel:
http://www.bloomberg.com/quote/CDSPDRAV:IND/
China Domestic Steel Rebar 25 mm Spot Average Price

Will be useful if the steel price continues to fall, with AKS and others as possible bankruptcy plays

 

[m22au]

Quote from m22au:

Although shorting Peugeot in a free market makes sense, it's important to remember that Governments often interfere with free markets.

This is demonstrated as a distinct possibility in this article:

"Peugeot’s Finance Unit May Get French Government Lifeline"

http://www.bloomberg.com/news/2012-...-funding-options-for-banking-division-1-.html

where Peugeot may receive a bailout, most likely without having to issue equity to the government as part of the process.

Update on Peugeot bailout:
http://www.bloomberg.com/news/2012-10-23/peugeot-said-to-consider-board-seats-in-state-aid-deal.html

Although there are operational restrictions ("greater government and worker influence"), it seems that UG gets the bond guarantee without any financial penalty (eg. issuance of stock to the government).

 

[m22au]

Peugeot Gets French State Backing as Debt Load Increases

http://www.bloomberg.com/news/2012-10-24/peugeot-to-raise-bank-credit-line-with-state-backing.html

UG stock breaks below 5.70 EUR to new 52-week low
www.bloomberg.com/quote/UG:FP