writser Posted March 12, 2021 Share Posted March 12, 2021 The price action today absolutely makes no sense to me. I sold my entire position around the opening, which was around unchanged from the close yesterday. Please tell me why that would be stupid. I might be missing something, this is absolutely no advice. Link to comment Share on other sites More sharing options...
hasilp89 Posted March 12, 2021 Author Share Posted March 12, 2021 The price action today absolutely makes no sense to me. I sold my entire position around the opening, which was around unchanged from the close yesterday. Please tell me why that would be stupid. I might be missing something, this is absolutely no advice. making sure i understand your question - you are asking - Why did this open above $6.25 today when buyers as of today have no rights to subscribe and are now common holders behind the new capital structure? People should be dumping the common now rights are recorded and just participate in the preferred. 1) just generally there may be some confusion about the dates here (incl. yours truly) - to confirm the $6.25 take out price use the same date as the subscription rights date? ie you can't buy today at $6.10 and sell at $6.25. 2) LT holders think common is worth more than current levels $6.50 despite dilution and new capital structure. This goes back to the EV question. However making that bet through the preferred still seems much more protected? 3) common holders who have a low basis is in the $1,$2, $3 range from purchases 2H 2020, tax implications on selling now? Expectation that there will be buying when it relists. 4) folks aren't paying attention - market is inefficient - pinch yourself its real... Link to comment Share on other sites More sharing options...
writser Posted March 12, 2021 Share Posted March 12, 2021 Yeah. The way I understand it, if you are buying today at $6.25, you should have DEFINITELY been buying yesterday at $6.50 because no matter how you slice or dice it, that was a much better bet. I wouldn't be surprised if some people regret their purchase today once they figure out the facts. On the flip side, these bankruptcies are not cookie cutter situations. The judge could still throw a spanner in the works, I could be missing some key stuff from the court room that is not in the docket yet (or that I glanced over), there is nothing on the FINRA daily list, etc. You operate with some uncertainty. And what happens if I reject the plan and vote for the cash-out is absolutely unclear to me. Seems like that would be almost impossible to reconcile with shares still trading and the record date being next Monday. It's a total mess, that's for sure. Link to comment Share on other sites More sharing options...
hasilp89 Posted March 12, 2021 Author Share Posted March 12, 2021 Yeah. The way I understand it, if you are buying today at $6.25, you should have DEFINITELY been buying yesterday at $6.50 because no matter how you slice or dice it, that was a much better bet. I wouldn't be surprised if some people regret their purchase today once they figure out the facts. On the flip side, these bankruptcies are not cookie cutter situations. The judge could still throw a spanner in the works, I could be missing some key stuff from the court room that is not in the docket yet (or that I glanced over), there is nothing on the FINRA daily list, etc. You operate with some uncertainty. one spanner i thought i saw posted on here was Gabelli's objection, not sure if that was resolved. could be that folks are holding in case the date was to move again... Link to comment Share on other sites More sharing options...
wabuffo Posted March 12, 2021 Share Posted March 12, 2021 Be careful - if you sell you lose the rights. My read is that this is a one-way due-bills situation. These diabolical bastards have design this process with many trap doors to relieve you of your subscription rights. The rights don't detach from the stock if you sell, they don't re-attach for the buyer of your stock, they go to the backstop party! So net, net - if you sell today you are handing your subscription rights to the backstop party. wabuffo Link to comment Share on other sites More sharing options...
hasilp89 Posted March 12, 2021 Author Share Posted March 12, 2021 Be careful - if you sell you lose the rights. My read is that this is a one-way due-bills situation. These diabolical bastards have design this process with many trap doors to relieve you of your subscription rights. The rights don't detach from the stock if you sell, they don't re-attach for the buyer of your stock, they go to the backstop party! So net, net - if you sell today you are handing your subscription rights to the backstop party. wabuffo yikes this is such a mess. i hadn't sold and at this point prob won't until i have the preferreds in my hands. Link to comment Share on other sites More sharing options...
wabuffo Posted March 12, 2021 Share Posted March 12, 2021 "“If you've been playing poker for half an hour and you still don't know who the patsy is, you're the patsy.” wabuffo (I realize Buffett is holding a bridge hand and not a poker hand, so don't @ me). Link to comment Share on other sites More sharing options...
benhacker Posted March 12, 2021 Share Posted March 12, 2021 (I realize Buffett is holding a bridge hand and not a poker hand, so don't @ me). I'm crying right now because someone would have... ;-) Link to comment Share on other sites More sharing options...
writser Posted March 12, 2021 Share Posted March 12, 2021 Whoops, playing with fire here! I bought my common back. I'm reasonably sure I can still exercise my rights but I could be wrong. And this is me trying to undo an error, in hindsight I would definitely not recommend trying what I did. Clearly I'm the patsy at the table, listen to Bill instead. Or even better, DYODD. Link to comment Share on other sites More sharing options...
hasilp89 Posted March 15, 2021 Author Share Posted March 15, 2021 strange/volatile price action today. dropped as low as $4.50 before recovering to around $6. Link to comment Share on other sites More sharing options...
wabuffo Posted March 16, 2021 Share Posted March 16, 2021 strange/volatile price action today. dropped as low as $4.50 before recovering to around $6. I think retail investors thought today was the last day to own the common and keep the rights (ie March 15th was a deadline and March 17 is the record date). Gabelli agrees with me and is asking the Judge to formalize March 17th as the record date. http://www.kccllc.net/garrettmotion/document/2012212210315000000000012 wabuffo Link to comment Share on other sites More sharing options...
Libs Posted March 23, 2021 Share Posted March 23, 2021 Sorry if this has been posted- but what is the timing of the rights offering? Link to comment Share on other sites More sharing options...
wabuffo Posted March 23, 2021 Share Posted March 23, 2021 Sorry if this has been posted- but what is the timing of the rights offering? on or about April 13th. wabuffo Link to comment Share on other sites More sharing options...
Ismael Posted March 27, 2021 Share Posted March 27, 2021 Anyone know whether the preferred will be publicly traded after the rights offering? Link to comment Share on other sites More sharing options...
hasilp89 Posted March 28, 2021 Author Share Posted March 28, 2021 Anyone know whether the preferred will be publicly traded after the rights offering? My understanding from the company is that they intend to list it and have it trade. Common would get re-listed also. Link to comment Share on other sites More sharing options...
Ismael Posted March 28, 2021 Share Posted March 28, 2021 Anyone know whether the preferred will be publicly traded after the rights offering? My understanding from the company is that they intend to list it and have it trade. Common would get re-listed also. Thanks, looks like the accredited investor shares are restricted and must be held for 6 months. On another note, it wasn't real clear whether we can subscribe to both the accredited investor shares as well as the 1145 rights offerings. I am assuming we can only scribe to one, but wondering if anyone else saw something that addresses this point. Link to comment Share on other sites More sharing options...
wabuffo Posted March 28, 2021 Share Posted March 28, 2021 On another note, it wasn't real clear whether we can subscribe to both the accredited investor shares as well as the 1145 rights offerings. I am assuming we can only scribe to one, but wondering if anyone else saw something that addresses this point. - every investor who owned the common on the record date (and continues to own it - if you sold after record date you lost the subscription rights) is eligible to elect to receive and pay for 1 subscription right per 1 common share. - on top of that, if you can prove you are an accredited investor, you get an extra .45 subscription rights per 1 common share for a total of ~1.45 subscription rights per common share. - or you can take the $6.25 cash-out price - but its either cash-out OR exercise and pay for rights - you can't do partial cash-out for $6.25 per share and partial rights subscription. wabuffo Link to comment Share on other sites More sharing options...
Ismael Posted March 29, 2021 Share Posted March 29, 2021 On another note, it wasn't real clear whether we can subscribe to both the accredited investor shares as well as the 1145 rights offerings. I am assuming we can only scribe to one, but wondering if anyone else saw something that addresses this point.- every investor who owned the common on the record date (and continues to own it - if you sold after record date you lost the subscription rights) is eligible to elect to receive and pay for 1 subscription right per 1 common share.- on top of that, if you can prove you are an accredited investor, you get an extra .45 subscription rights per 1 common share for a total of ~1.45 subscription rights per common share.- or you can take the $6.25 cash-out price - but its either cash-out OR exercise and pay for rights - you can't do partial cash-out for $6.25 per share and partial rights subscription.wabuffoThanks, I confirmed this with the company as well. It is kind of hard for me to wrap my head around the fact that shareholders with more wealth get a better deal. Link to comment Share on other sites More sharing options... hillfronter83 Posted March 29, 2021 Share Posted March 29, 2021 Whoops, playing with fire here! I bought my common back. I'm reasonably sure I can still exercise my rights but I could be wrong. And this is me trying to undo an error, in hindsight I would definitely not recommend trying what I did. Clearly I'm the patsy at the table, listen to Bill instead. Or even better, DYODD.I didn't sell any shares but bought a few more shares when price came down. I hope this doesn't disqualify my ability to tender or participate in the right offering. However, now IB is showing the total number of shares as eligible to participate in offering(at least on the surface). I suspect this will be a nightmare for all the brokers and their systems to figure out which shares have which rights... Link to comment Share on other sites More sharing options... writser Posted March 30, 2021 Share Posted March 30, 2021 Thanks, I confirmed this with the company as well. It is kind of hard for me to wrap my head around the fact that shareholders with more wealth get a better deal. Yeah, it sucks. Unfortunately the stock market is often two-tiered like that. Exercising appraisal rights, reclaiming foreign withholding taxes, private placements, access to management, going activist, joining lawsuits, greenmailing, etc .. You often get a better deal / more options if you have a couple of million to spare and/or operate with large positions.Whoops, playing with fire here! I bought my common back. I'm reasonably sure I can still exercise my rights but I could be wrong. And this is me trying to undo an error, in hindsight I would definitely not recommend trying what I did. Clearly I'm the patsy at the table, listen to Bill instead. Or even better, DYODD.I didn't sell any shares but bought a few more shares when price came down. I hope this doesn't disqualify my ability to tender or participate in the right offering. However, now IB is showing the total number of shares as eligible to participate in offering(at least on the surface). I suspect this will be a nightmare for all the brokers and their systems to figure out which shares have which rights...I think IB is taking the approach: you can only participate with your current position, they will make sure that users do not participate with a larger position than your position on the record date (on account level or perhaps even on company level) and they don't give a shit about what you did inbetween. That should be relatively easy for them. If that is the case, then in hindsight I think it was possible to sell and buy back this week at IB for a nice scalp. Still not 100% sure about that. If the transfer agent requires extra information or whatever things could still go haywire for me but I think that is unlikely at this point.I even think there is a non-zero chance that you can also participate with your newly-bought shares if IB is lazy and their company-wide position on the record date allows it (i.e. others don't forget to exercise their rights). But again I would definitely not recommend doing that, it's probably illegal and it will very likely not work out and cause problems. Link to comment Share on other sites More sharing options... 2 weeks later... hillfronter83 Posted April 7, 2021 Share Posted April 7, 2021 At current price, is anyone considering buying stock and then tender the share at $6.25? For retail investors, you can own 2 common shares by paying additional $4.15 ( buy two shares at $5.2/shr then tender original share at $6.25) or own 1 common and 1 series A preferred by paying additional $5.25. In another question, how much more does one preferred share worth than common? Link to comment Share on other sites More sharing options... wabuffo Posted April 7, 2021 Share Posted April 7, 2021 (edited) At current price, is anyone considering buying stock and then tender the share at $6.25? you can't - the record date passed.... wabuffo Edited April 7, 2021 by wabuffo Link to comment Share on other sites More sharing options... hillfronter83 Posted April 7, 2021 Share Posted April 7, 2021 26 minutes ago, wabuffo said: At current price, is anyone considering buying stock and then tender the share at $6.25? you can't - the record date passed.... wabuffo Sorry, my language was confusing. I meant buy shares at $5.2ish now and tender shares you already own before record date: So if you buy 2 shares now and tender 1 share you own (before record date), you will own two common after reorg by paying 2X5.2-6.25=$4.15 additional. Or you can subscribe for preferred paying $5.25 to own 1 common and 1 preferred after reorg. Thoughts? Link to comment Share on other sites More sharing options... wabuffo Posted April 7, 2021 Share Posted April 7, 2021 oh ok - I think these are two independent decisions. The other thing to think about is that most retail holders and non-backstop party-affiliated holders can't sell their shares lest they lose their subscription rights. If you look, you'll notice that the trading volume on this stock fell dramatically after the record date and has basically dried up. So there are no sellers right now. But buying demand is low too - since any significant demand for the stock would drive the price up. My guess is that when the subscription rights collars come off in mid-April-ish, there will be a brief surge in selling. Will the stock be available at much lower prices then? Who knows - but it could set up that way. Of course, my trading skills are horrendous so don't listen to me. wabuffo Link to comment Share on other sites More sharing options... writser Posted April 7, 2021 Share Posted April 7, 2021 2 hours ago, hillfronter83 said: Sorry, my language was confusing. I meant buy shares at $5.2ish now and tender shares you already own before record date: So if you buy 2 shares now and tender 1 share you own (before record date), you will own two common after reorg by paying 2X5.2-6.25=$4.15 additional. Or you can subscribe for preferred paying $5.25 to own 1 common and 1 preferred after reorg. Thoughts? It's an interesting way too look at the situation. The series A prefs are senior to the common, they yield 11% and you are aligned with the big boys (who all signed up for the prefs). Unless Garrett is flipped immediately to another buyer I'd say I 'd rather keep my common and pay up for the pref in your example. But yeah, common traded as low as ~$4.50 the past few days and you could certainly argue that selling your common for $6.25 and buying some back much lower is a valid alternative to holding on to your position just to get the prefs. It's difficult to make sense of the pricing the past few months. Perhaps the correct answer is that you should do both, get the prefs AND buy in the open market . Link to comment Share on other sites More sharing options... Prev 1 2 3 4 5 6 7 Next Page 5 of 7 Create an account or sign in to comment You need to be a member in order to leave a comment Create an account Sign up for a new account in our community. It's easy! Register a new account Sign in Already have an account? Sign in here. Sign In Now Share More sharing options... Followers 0
hillfronter83 Posted March 29, 2021 Share Posted March 29, 2021 Whoops, playing with fire here! I bought my common back. I'm reasonably sure I can still exercise my rights but I could be wrong. And this is me trying to undo an error, in hindsight I would definitely not recommend trying what I did. Clearly I'm the patsy at the table, listen to Bill instead. Or even better, DYODD.I didn't sell any shares but bought a few more shares when price came down. I hope this doesn't disqualify my ability to tender or participate in the right offering. However, now IB is showing the total number of shares as eligible to participate in offering(at least on the surface). I suspect this will be a nightmare for all the brokers and their systems to figure out which shares have which rights... Link to comment Share on other sites More sharing options...
writser Posted March 30, 2021 Share Posted March 30, 2021 Thanks, I confirmed this with the company as well. It is kind of hard for me to wrap my head around the fact that shareholders with more wealth get a better deal. Yeah, it sucks. Unfortunately the stock market is often two-tiered like that. Exercising appraisal rights, reclaiming foreign withholding taxes, private placements, access to management, going activist, joining lawsuits, greenmailing, etc .. You often get a better deal / more options if you have a couple of million to spare and/or operate with large positions.Whoops, playing with fire here! I bought my common back. I'm reasonably sure I can still exercise my rights but I could be wrong. And this is me trying to undo an error, in hindsight I would definitely not recommend trying what I did. Clearly I'm the patsy at the table, listen to Bill instead. Or even better, DYODD.I didn't sell any shares but bought a few more shares when price came down. I hope this doesn't disqualify my ability to tender or participate in the right offering. However, now IB is showing the total number of shares as eligible to participate in offering(at least on the surface). I suspect this will be a nightmare for all the brokers and their systems to figure out which shares have which rights...I think IB is taking the approach: you can only participate with your current position, they will make sure that users do not participate with a larger position than your position on the record date (on account level or perhaps even on company level) and they don't give a shit about what you did inbetween. That should be relatively easy for them. If that is the case, then in hindsight I think it was possible to sell and buy back this week at IB for a nice scalp. Still not 100% sure about that. If the transfer agent requires extra information or whatever things could still go haywire for me but I think that is unlikely at this point.I even think there is a non-zero chance that you can also participate with your newly-bought shares if IB is lazy and their company-wide position on the record date allows it (i.e. others don't forget to exercise their rights). But again I would definitely not recommend doing that, it's probably illegal and it will very likely not work out and cause problems. Link to comment Share on other sites More sharing options...
hillfronter83 Posted April 7, 2021 Share Posted April 7, 2021 At current price, is anyone considering buying stock and then tender the share at $6.25? For retail investors, you can own 2 common shares by paying additional $4.15 ( buy two shares at $5.2/shr then tender original share at $6.25) or own 1 common and 1 series A preferred by paying additional $5.25. In another question, how much more does one preferred share worth than common? Link to comment Share on other sites More sharing options...
wabuffo Posted April 7, 2021 Share Posted April 7, 2021 (edited) At current price, is anyone considering buying stock and then tender the share at $6.25? you can't - the record date passed.... wabuffo Edited April 7, 2021 by wabuffo Link to comment Share on other sites More sharing options...
hillfronter83 Posted April 7, 2021 Share Posted April 7, 2021 26 minutes ago, wabuffo said: At current price, is anyone considering buying stock and then tender the share at $6.25? you can't - the record date passed.... wabuffo Sorry, my language was confusing. I meant buy shares at $5.2ish now and tender shares you already own before record date: So if you buy 2 shares now and tender 1 share you own (before record date), you will own two common after reorg by paying 2X5.2-6.25=$4.15 additional. Or you can subscribe for preferred paying $5.25 to own 1 common and 1 preferred after reorg. Thoughts? Link to comment Share on other sites More sharing options...
wabuffo Posted April 7, 2021 Share Posted April 7, 2021 oh ok - I think these are two independent decisions. The other thing to think about is that most retail holders and non-backstop party-affiliated holders can't sell their shares lest they lose their subscription rights. If you look, you'll notice that the trading volume on this stock fell dramatically after the record date and has basically dried up. So there are no sellers right now. But buying demand is low too - since any significant demand for the stock would drive the price up. My guess is that when the subscription rights collars come off in mid-April-ish, there will be a brief surge in selling. Will the stock be available at much lower prices then? Who knows - but it could set up that way. Of course, my trading skills are horrendous so don't listen to me. wabuffo Link to comment Share on other sites More sharing options...
writser Posted April 7, 2021 Share Posted April 7, 2021 2 hours ago, hillfronter83 said: Sorry, my language was confusing. I meant buy shares at $5.2ish now and tender shares you already own before record date: So if you buy 2 shares now and tender 1 share you own (before record date), you will own two common after reorg by paying 2X5.2-6.25=$4.15 additional. Or you can subscribe for preferred paying $5.25 to own 1 common and 1 preferred after reorg. Thoughts? It's an interesting way too look at the situation. The series A prefs are senior to the common, they yield 11% and you are aligned with the big boys (who all signed up for the prefs). Unless Garrett is flipped immediately to another buyer I'd say I 'd rather keep my common and pay up for the pref in your example. But yeah, common traded as low as ~$4.50 the past few days and you could certainly argue that selling your common for $6.25 and buying some back much lower is a valid alternative to holding on to your position just to get the prefs. It's difficult to make sense of the pricing the past few months. Perhaps the correct answer is that you should do both, get the prefs AND buy in the open market . Link to comment Share on other sites More sharing options...
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