Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Think4Yourself who wrote (45633)	5/28/1999 2:20:00 PM
From: SliderOnTheBlack	Read Replies (3) \| Respond to of 95453

{ "FGI needs to buy HLX as bad, if not worse than HLX needs to sell/merge } .... FGI needs to diversify. They are NOT receiving full value for their backlog and stellar earnings performance because of one reason. The reason is the ''Street, Analysts/Fund Managers (not my opinion) feel and perhaps rightfully so; that FGI is working off of a backlog that can not and will not be duplicated, or rebuilt. They feel that the Offshore Rig Construction boom of 1996-97 (resulting in 1997-9 construction) is unsustainable and not repeatable... their opinion, not mine. While part of FGI's ''short position'' which is beyond huge -( it literally ''leads the league'' so to speak) may indeed be part of a savvy ''hedging'' position; there are more than a few traders, hedge funds shorting FGI because as the backlog gets built out and worked off; it will not be replaced and FGI will be working from a much smaller backlog base. FGI has allready semi-acknowledged this, as they have commented on diversifying into repair/refurb work. FGI needs to diversify and/or to get a bigger piece of the market. I and many think that this ''diversification'' is more important than growing market share in their subsector. HLX has demonstrated that the bidding wars in Fab work during tough times is not unlike dayrates for drillers - they fall to below profitable levels and the ability to profitably grow market share in tough times to any substantial degree - is virtually impossible. ....as such; I stand by the ''fact'' - that FGI needs HLX ( or someone) as much as HLX needs FGI.. FGI needs to end the short selling and knows it needs to diversify. Also, imho this is not as much of a panic sale for HLX as the media suggests imho... I see a stock deal closer to $10 and am re-buying my HLX back 10% cheaper today (got filled at at $7 and now sitting at $6 3/8ths) than where I sold yesterday. As my original half position remaining cost basis is $5 - I am in a good position to play out this deal/no deal and still be profitable... bottomline: FGI needs to do something.... this is the 2nd date - something is ''gonna happen''... and I do not see HLX leaving the table with less than that .58 compromise , or a high $9 to $10 offer... $12 would not surprise me...and I have no problem riding HLX out here without a deal - I'd dump my 1/2 re-bought at $7 here and ride the $5 shares out longterm... This looks like a good trade here to me - on an otherwise boring pre-weekend day... back from my vacation - now to the yard work.......