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Top POSCO Executives Resign Over Scandal

All 32 top executives at steelmaker POSCO resigned Thursday and the company formed a special committee to overhaul its image and business culture.

 

The resignations come amid allegations that the steelmaker was involved in a widening political graft scandal that forced the prime minister to step down.

 

A POSCO spokesman promised the reform committee, headed by chairman Kwon Oh-joon, will spearhead changes.

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Guest notorious546

Top POSCO Executives Resign Over Scandal

All 32 top executives at steelmaker POSCO resigned Thursday and the company formed a special committee to overhaul its image and business culture.

 

The resignations come amid allegations that the steelmaker was involved in a widening political graft scandal that forced the prime minister to step down.

 

A POSCO spokesman promised the reform committee, headed by chairman Kwon Oh-joon, will spearhead changes.

 

http://www.koreaherald.com/view.php?ud=20150514001235

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Top POSCO Executives Resign Over Scandal

All 32 top executives at steelmaker POSCO resigned Thursday and the company formed a special committee to overhaul its image and business culture.

 

The resignations come amid allegations that the steelmaker was involved in a widening political graft scandal that forced the prime minister to step down.

 

A POSCO spokesman promised the reform committee, headed by chairman Kwon Oh-joon, will spearhead changes.

 

oh, well. I have to say Korean has better corporate ethic than Chinese company. In China( or Taiwan), nobody is going to resign. They go to jail sometimes, but resign, unheard of.

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During his recent visit to Korea earlier this month, Prime Minister Narendra Modi had a closed-door meeting with Posco CEO Kwon Oh-Joon. According to the ministry of external affairs (MEA) officials, the Odisha project was not even raised by its chief. Sources said it was a clear signal by the company that it is planning to exit the project.

 

http://www.business-standard.com/article/economy-policy/govt-mulls-korea-plus-even-as-poscos-12-bn-steel-plant-hangs-in-air-115052801271_1.html

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POSCO Engineering & Construction Co Ltd said on Tuesday it was issuing new shares worth 397 billion won ($356.8 million) to a special purpose company set up by Saudi Arabia's Public Investment Fund.

 

South Korean steelmaker POSCO which owns nearly 90 per cent of construction unit POSCO E&C, had been seeking to offload assets and cope with the steel market downturn.

 

Read more at:

http://economictimes.indiatimes.com/articleshow/47512818.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

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The decline in Posco is relentless. Seems like it's down 2-3% nearly every day. I'm slowly accumulating a position in my IRA as it falls and once I reach a certain point I'll sell the ones in my taxable account (after a 31 day delay) to get some relief on my gains this year. The double position is killing me though as it goes lower every day...

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The decline in Posco is relentless. Seems like it's down 2-3% nearly every day. I'm slowly accumulating a position in my IRA as it falls and once I reach a certain point I'll sell the ones in my taxable account (after a 31 day delay) to get some relief on my gains this year. The double position is killing me though as it goes lower every day...

 

Wow. Last time I looked this was still in the way to expensive group, this going down fast. If I can find some time I'll investigate, did anything materially change lately or just the overall steel glut?

 

What is your fv estimate?

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I think Munger said in a speech he purchased it when it was @ 5-6Xeps and had no debt at that level.  Still a very very far way to fall to get back to these levels and then it would be a massive no brainer.

 

Youre right though its dropping everyday I would love to get shares around $30 when the eps valuation would be single digit and it would be at a ridiculously low PB valuation.

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The decline in Posco is relentless. Seems like it's down 2-3% nearly every day. I'm slowly accumulating a position in my IRA as it falls and once I reach a certain point I'll sell the ones in my taxable account (after a 31 day delay) to get some relief on my gains this year. The double position is killing me though as it goes lower every day...

 

TwoCitiesCapital.. Do wash sale rules not apply for a person regardless of what account it is in?

 

I think Munger said in a speech he purchased it when it was @ 5-6Xeps and had no debt at that level.  Still a very very far way to fall to get back to these levels and then it would be a massive no brainer.

 

Youre right though its dropping everyday I would love to get shares around $30 when the eps valuation would be single digit and it would be at a ridiculously low PB valuation.

 

30 ?  I'll shit my pants at that price  :'(

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Posco is one of those companies that would inevitably regress to the mean when steel prices improve.  Even if your per unit price is high and it goes to $30 no doubt it will go back to 1x book value.

 

Id just rather wait until it stabilizes.  Seems like unfortunate news each day. 

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Posco is one of those companies that would inevitably regress to the mean when steel prices improve.  Even if your per unit price is high and it goes to $30 no doubt it will go back to 1x book value.

 

Id just rather wait until it stabilizes.  Seems like unfortunate news each day.

 

What is the "mean" for steel prices?

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The decline in Posco is relentless. Seems like it's down 2-3% nearly every day. I'm slowly accumulating a position in my IRA as it falls and once I reach a certain point I'll sell the ones in my taxable account (after a 31 day delay) to get some relief on my gains this year. The double position is killing me though as it goes lower every day...

 

TwoCitiesCapital.. Do wash sale rules not apply for a person regardless of what account it is in?

 

 

The wash sale rule is why I have to wait the 31 days I mentioned.

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  • 2 weeks later...

52 week lows today. Has anyone looked at how much debt Posco has? How much does the parent actually have? Also it looks like most of the subsidiaries are not worth much.

 

As of Q1 the parent has about $5.8B in debt at the current exchange rate. The good news is that this has come down significantly in just the last few quarters.

 

POSCO thinks that subsidiaries are worth quite a lot. I've attached the YE 2014 values, but I haven't had time to dig in to how realistic they may be.

Posco_Sub.thumb.PNG.a0e7d6f1fd5aa6d12f30a24f5f5e7264.PNG

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A few articles on China that might be of interest for the folks following this thread. Seems like output from China is finally on a downward trajectory, and maybe consolidation can lead to further capacity reductions.

 

China Deepens Steel Cuts as Iron Bull Market Crushes Profit

http://www.bloomberg.com/news/articles/2015-06-19/china-deepens-steel-cuts-as-iron-ore-bull-market-crushes-profit

 

China’s Churning Out Steel And the World Isn’t Happy

http://www.bloomberg.com/news/articles/2015-06-18/china-s-churning-out-steel-and-the-rest-of-the-world-isn-t-happy

 

China’s Steel Slowdown Seen Setting Stage for Consolidation

http://www.bloomberg.com/news/articles/2015-06-17/china-s-steel-slowdown-seen-setting-stage-for-consolidation

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  • 4 weeks later...

Posco 2Q earnings and presentation of new business plan out today:

 

http://www.posco.com/homepage/docs/eng3/dn/invest/archive/2015_2Q_Presentation_eng_final.pdf

 

Well...note quite sure we're on target for tripling earnings as of this year like they had thought back in February, but their projections for how quickly they plan to reduce foregin/domestic subsidiaries and scaling up new business looks good.

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