SargeK; Oliver Stone has nothing over you in the "conspiracy theory" arena.
First, no one can "debate" with you - that would be like talking to a parrot...
Second, nothing I say could move FGH 1 tic... I may, or may not trade FGH again. But, I will tell you that I would NOT be holding FGH stock when the earnings announcement comes out...
My main point is that YOU had no clue in the world as to what FGH's problems were, or that they were to the degree that they obviously were ! Or, even that they had announced to analysts - per the Merrill report; that they were dumping the shipbuilding business - ie: explaining Dane's sudden & unexplained departure - becoming one of , if not THE management faux paux of the entire Oilpatch in 1999-2000. The board of directors in fact approved investment bankers to pursue "strategic alternatives."
You also TOTALLY BLEW IT - and cost many people the no-brainer opportunity to take the tax loss deduction for 1999 as well; hell at least they could have been out at $10, gotten the deduction and been back in at between $5 and $7 here if they so desired.
You have NOT gotten anything right on this entire scenario yet Sarge ? - how about Friday's call for a 10% pop that day and "double digits" within 10 days ?
<<Headed for double digits likely within 10 trading days...
FGH WILL move HIGHER TODAY! (a range of 8 to 9 is NOT unlikely)
SargeK>>
My main bone to pick with you personally; is that you would sell your Mother downstream to pump your personal position of having all your eggs in the FGH basket. You've been whistling by the cemetary & talking your own position endlessly and shamelessly to the detriment of everyone.
Worse than that - you bring a long and well known history of having done this exact same thing in the past.
Sarge; do you know how close you came to literally becoming an Internet legend ? I guarantee you that if FGH would have filed a Bankruptcy Re-Org plan - that your then complete Hat Trick of; Cityscape, HMAR and now FGH - would have elevated you beyond the label of " Internet AntiChrist" that Frank in Birmingham so aptly labeled you (VBG).
... do you know how close FGH was here ? - wow... !
Obviously to anyone without an obsessive-compulsive emotional attachment to FGH; but sadly not to you; they were teetering dangerously on the edge of a major financial crisis and many were predicting and expecting the filing of a Bankruptcy Re-Org plan if they were not saved at the bell by the settlement with Ocean Rig.
This must be taken in perspective with theStreet.Com expose on FGH's alleged accounting irregularities/issues. To all who "poo-poo'd" those articles, to all those who chose to just ignore the fact the FGH had over 20% of it's float shorted; there were OBVIOUSLY - major significant problems at FGH.
JL Holloway's credibility and perhaps his competance; has to be in question here in my personal opinion; with what now can only be described as a complete "F - UP" of this merger with HLX. Either he was totally out of touch with the financial condition of his company, or someone at the HLX side sold him a "pig in a poke" - because for Dane to be ousted this quickly after being crowned as JL's hand picked successor in just two years - is incredulous ! It is sheer managerial incompetance !
For this to have went from an exciting merger creating a new more diversified, stronger Rig & Shipbuilding powerhouse, to mere months later - seeing the "CEO to be"; canned, then announcing that they are considering dumping the very assets they just bought and also possibly were teetering on the edge of Bankruptcy in the opinion of some - is managerial incompetance !
From what I see; this guy is now - THE CLOWN of the entire Oilpatch - period. The only thing this guy did right imho; was to go public with the IPO at the right time & at the right place, in a once in a lifetime Offshore Rig Construction Boom that may never be repeated - period. It has been all downhill since imho. A couple of very large Offshore Rig Construciton Contracts made this company - they are living the ghost of a backlog and a boom that was - and is no more...
They still have not put anything of any material substance on the backlog books. This Ocean Rig settlement may ONLY be a short stay of execution.
Run the numbers of the present backlog burn rate; and where will they be after this project is completed ? Petrodrill is a "must have" proposition now - and is looming like a guillotine over them at present.
That however is only half of their problems.
#1. What damn business are they in ? Are they, or aren't they in the shipbuilding business ? If they are not - what the hell was JL Holloway thinking with the merger with HLX ?!?!?!
BUT ! - if they are now "back in" the shipbuilding buisiness; it is obvious just how close to the flame JL's hand got. With the Ocean Rig settlement saving them; is it really unreasonable to think they may be right back in this position again soon ? Personally I am not comfortable betting on that type of guy with MY money, they were teetering on the edge and simultaneously blowing smoke up everyone's ass in my opinion.
#2. Let's see what the charges are - and will they show as loss for this coming quarter; and how will the stock react when this hits ? Also, if they do sell other assets - what charges will be forthcoming and for how long will this hang over FGH's head & depress the stock price ?
It is now clear that this was NOT a merger of strength - but perhaps merely a last ditch effort at survival ?
#3. FGH's stock aint going anywhere fast without major Institutional support - which was never substantial in FGI to begin with. With these total F-Up's of late; who in their right mind is going to believe, or trust these guys, let alone put their money in their hands ?
The entire Oilpatch is ready to bust out - why ride a dog with flea's when there are Greyhounds waiting to bust out of the gate all around us ?
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Some highlights from Mavis Scanlon's - TSC expose articles:
<<On June 22, the Center for Financial Research and Analysis, an independent research firm known for detecting misleading accounting practices, issued a five-page analysis of Friede's financials. It concludes that Friede's increased use of aggressive accounting methods may have boosted earnings in recent quarters. Among its issues, CFRA says Friede has falling margins, weakening operating cash flow and a questionable rise in unbilled receivables. It also includes in its backlog a contract it hasn't definitely sealed, CFRA notes.>>
<<In addition, it's unlikely Friede will meet minimum man-hour requirements this year at its Canadian subsidiary. If so, Friede will have to pay the Canadian government a penalty of about $3.5 million on a pretax basis, the document says. Analysts say Friede may set up a reserve for this fine in the third quarter. The Canadian fine "is more important because that is surprising and out of the blue," says Poe Fratt, who follows Friede at A.G. Edwards in St. Louis. "The market should know about Ocean Rig and the possibility they'd have to take a charge to back out some of the profit and fixed-cost absorption. But the surprise is they have 1.2 million man-hours they might not be able to book up in Canada, and they are not getting enough work."
When Friede purchased the facilities in Newfoundland in early 1998, it agreed to maintain a minimum of 1.2 million man-hours a year from 1998 through 2000. In exchange, the Canadian government sold Friede the shipyard for $1. At June 30, 459,000 man-hours had been booked. FGI may just pay a fine this year while pushing other projects into next year to meet that minimum, Fratt says. The fine works out to about 10 cents per share on an after-tax basis, he adds.
Friede didn't return calls seeking comment. >>
<<Business Wire - January 12, 2000 08:57
GULFPORT, Miss.--(BUSINESS WIRE)--Jan. 12, 2000--Friede Goldman Halter, Inc. (NYSE: FGH) today announced that the Company was taking certain steps to minimize the financial and operational impact of problems resulting from four rig construction contracts with two customers and plans to aggressively evaluate all non-strategic assets and operations for divestiture opportunities....
...As a result of the continued sluggish market conditions through the fourth quarter, merger related costs and the impacts of the Ocean Rig contracts, the Company anticipates that it will report a loss for the quarter ended December 31, 1999....
...The board of directors approved the Company's actions with regard to the Ocean Rig and Petrodrill projects and also strongly endorsed the Company's ongoing efforts to strengthen its position in the marketplace by aggressively evaluating all non-strategic assets and operations for divestiture opportunities. The board approved the retention of an investment banking firm to facilitate the process.>>
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Sarge; do you recall when both HMAR and Cityscape issued these very words - "evaluating all non-strategic asset & operations for divestiture opportunitites" ? You were so close to that Hat Trick, so close...(VBG).
One final thought; just what the hell was J.L. Holloway thinking when he merged with HLX ? - only to months later; dump Dane and be hiring investment bankers to "evaluate all non-strategic asset & operations for divestiture opportunitites" ?!?!?!
This guy has blown more smoke than Mt. St. Helens...
Sure there is the potential huge upside should FGH pull out of this - but, one has to measure the potential upside with the potential risk; with so many laggard stocks still out there - why bother !?!?
Take UFAB for example; here is a stock just as much off of its highs as FGH and they have NONE of the accompanying baggage and problems as FGH. They also do NOT need the huge $150 Million at a pop - offshore Rig Construction orders that FGH needs.
UFAB & FGH - which one runs to $20 quicker, which one will see $40 again ?
... well no one can answer that question; but one sure as hell can compare the "Risk" factor's between the two companies.
If you "have" to play the Fab's - this looks to be a pretty easy risk vs. reward proposition to me. UFAB ! |
