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Gold/Mining/Energy : Pride Petroleum Services (PDE) -- Ignore unavailable to you. Want to Upgrade?

To: kgreen who wrote (390)	3/2/1999 10:46:00 PM
From: Bill Zeman	Read Replies (3) \| Respond to of 454

kgreen You said, "PDE's parts are actually worth far more than its whole. You could sell the equipment for a dime on the dollar and still make up the stock price." This is not true. When the oil companies were going bankrupt in the early 80's, the break up value came out to about 20% of book value in the companies that had a lot of equipment. That would put PDE's break up value in the high 2's. I believe a lot of the big money knows this, and that is why you have seen PDE plunge so far to current levels. The longer the oil glut continues, the more likely PDE will go bankrupt, and so we should see the stock continue to drift down toward the high 2's. This is where I am looking to double down and pray for a rally or buy out. Most of the bullish talk I read is all about how the oil producers will finally cut back and prices will finally rally. They say the rally will be sustained because it will take a lot of time for all the equipment and the capped wells to get back on line. This is all based on supply side thinking. It simply won't happen this way. Even if the oil producers ever do get some sense, (doubtful when you consider the Saudi situation), the rally will be short lived. As soon as the oil producers all cut back and prices start to increase, they will all jump back in again and effectively kill the recovery. Only a surge in demand as well as lowering supply can pull us out of this problem. With the aisan flu likely to drag on for years and Japan going into their 2nd decade of depression, with Brazil and the Russians and all the other economies that are tanking and will soon tank, a surge in demand is unlikely to come for at least a few years. Thus my pessimism. Can anybody dispute this? Please do. I will welcome any reasonable arguments to prove me wrong. I hope I am wrong. No "PDE is undervalued man, it's gonna kick butt now dude" type posts please. They don't chear me up, but rather the more of those I read, the more my contrarian indicator tells me there are enough suckers still left out there to continue to fuel a steady decline. Bill Zeman