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Gold/Mining/Energy : Strictly: Drilling and oil-field services -- Ignore unavailable to you. Want to Upgrade?

To: upanddown who wrote (51404)	9/19/1999 3:46:00 PM
From: SliderOnTheBlack	Respond to of 95453

John C;.... now you're getting warm (VBG). re: <<. I think there is some slim possibility of further sweetening but that would only benefit HLX holders to the detriment of FGI holders. JMO.>> ... merely "one" of the reasons the "Short" Money is also the "Smart" Money in FGI - and the "Smart" Money will cover & go long HLX if they see the merger coming together - especially so (VBG); if they realize the short pressure on FGI could further sweeten the ratio pie... PS: - I never said; I had the original idea on shorting FGI into this deal either; I just see it as a short term "trading opportunity" - with very, very little risk - given the "quiet period". Simply riding the coat-tails here; nothing more - nothing less. One can easily hedge the FGI short via HLX long - averaging in - if HLX retraces in ratio sympathy to FGI's decline; or be more risk oriented and only go long HLX; upon a technical reversal in FGI, or simultaneously going long HLX upon covering the FGI short. Among the "other" reasons that the "Smart Money" is short FGI here:imho ... the technicals and the momenteum cry out for one to ride the coat-tails ... backlog needs triage - anyone have a couple of $200M tourniquets handy ? ... posterchild for a lagging subsector; with Cap Ex spending in this area coming off the heels of rampant cancelations, or delay attempts - and mucho litigation. - and now Street sentiment toward huge Cap Ex spending on Offshore Rigs has changed overnight ? - think the Oil Companies, & the likes of Petrobras, PDE, or FLC; or their Bankers, or Bondholders want them to enter this type of Cap Ex spending - ANYTIME in the near future to the degree of late... ? and we are talking about "nearterm" here, 3-9 mos. ... insider sales; and no substantial buying support here of late; even though there have been at least 3 opportunities to buy the stock well below the initial IPO price of late ... short interest - virtually "leading the league" here ... JL Holloway pre-announcing retirement in 2 years ... JL Holloway and other insiders (regardless of the reasons) having a track record of having had, or filing to sell, dispose,or transfer a significant amount of insider stock allready; does anyone not see the likelihood of this continuing - especially into shareprice strength in the future - given his retirement in 2 years ? ... called "negative overhang" by the way - and they still have a ton of insider stock - potentially "overhanging" the upside ! ... the nature of being defenseless during the "quiet period" - it's not about fighting fair for the "shorts" - it's about making money. The best time to unleash a flurry of punches - is when your opponent can't fight back - period. Did anyone see the CNBC piece of about Julian Robertson's Tiger Funds - "weak positions" often being the "short targets" of hedge fund traders ? - same parallels to the FGI situation... it is not illegal, nor is it unethical; it is a way to make money. - certainly; no less ethical than a major insider - taking huge IPO $; then dumping again via insider selling while shareholders see their shareprice in freefall. Turnabout is fair play... and in some cases; the shorts may actually be trading/selling in the same direction as the insiders (VBG) - now, can you imagine the "shark infested feeding frenzy" in those situations... ? ... maybe, you just saw one - if you weren't snoozing at the wheel here ? Maybe the reason FGI virtually leads the league in short interest; is there are 2 traditionally opposing forces; actually moving in unison here (VBG) ??!!!!!! ... FGI in the opinion of many; now needs HLX, more than HLX needs FGI. The need for FGI's sweetening of the offer ratio - was not a sign of HLX's confidence in the "value" of FGI's stock here - nor, in its upside nearterm. Another sweetening of the ratio appears to be a real possibility; should "someone" be able to put pressure on FGI's stock here... who wins in that scenario ? - ask yourself what you would do if you were a trader, or hedge fund - with a $8-12 cost basis in HLX over the years ? - let FGI lock in a substantial loss for you; or short FGI - placing continued leveraged pressure upon FGI to maximize the ratio and also maximizing your upside in HLX stock; upon the short covering on FGI ? ... per the above; lots of potential "forces" at work ... If the "Naval" contracts start to appear to be more of a reality; does HLX really even need FGI any longer ? ... what if HLX lands a $100-$200 Million Rig Construction order, or two; before FGI does; does HLX then need FGI any longer ? - and what would "THAT" do to the exchange ratio (VBG) !?!?!?! ... what if someone else is in the wings - with a stock that is at it's 52 week high - "currencywise" vs. a 52 week low - ala FGI; and is making overtures to HLX here ? ... how will the Street punish FGI for blowing the deal; what if they are actually either punishing them all ready right here, or pricing that potential into FGI's shareprice right now ??? How many times has the obvious here in the Oilpatch- turned out to not be so... ? PS: Momma allways said, never point to a problem, if you don't propose a solution: so here's one - for those who don't want to play the short FGI/long HLX trade: a much more simplistic and much better risk vs. reward play than merely staying long FGI here imho. MDR, or GLBL - much, much better - and more "bread & butter" oriented plays on the overall, more general "construction" side of the Oilpatch recovery... may be more Nat Gas oriented platform & pipeline work than major Offshore Rigs being built nearterm...