obtuse_investor Posted November 20, 2013 Share Posted November 20, 2013 Anyone have the link to Tsx buyback rules? They seem to be rather onerous, relative to the american markets. Link to comment Share on other sites More sharing options...
triedtestedand Posted November 20, 2013 Share Posted November 20, 2013 Obtuse: Was just going to post this, to manage Liberty's expectations. The basics are actually contained in the FTP NCIB press release from August 19th, cut-n-pasted as follows: "Any securities acquired will be purchased at the market price up to a daily maximum of: (i) 11,073 Common Shares; (ii) $19,276 principal amount of 6.5% Debentures; and (iii) $32,362 principal amount of 7.0% Debentures, subject to the block purchase exemption, and will be cancelled following purchase." So not a huge volume allowed per day. Also, they can't bid higher than most recent transaction, etc. Note that the block purchase exemption allows them to buy something, once a week I believe, that is much larger. I'd have to go hunting on google for the details ... I'm guessing (don't hold me to it) that if you check SEDAR.COM and/or SEDI.CA after December 10th, we will know if they are active ... as by then FTP will have to file an insider report for the previous month (like Invesco does, currently owning 2.5M+ shares) Link to comment Share on other sites More sharing options...
Liberty Posted November 20, 2013 Author Share Posted November 20, 2013 Based on the last call, they seem to want to take advantage of the block exemption to buy big blocks. I'm hoping that maybe some of the volume from the past few days included some of these big blocks. Link to comment Share on other sites More sharing options...
libor.plus1 Posted November 20, 2013 Share Posted November 20, 2013 Where can I check the bond prices, and what's the ticker? Link to comment Share on other sites More sharing options...
lessthaniv Posted November 20, 2013 Share Posted November 20, 2013 they trade on the tsx. ftp.db ftp.db.a Link to comment Share on other sites More sharing options...
alertmeipp Posted November 20, 2013 Share Posted November 20, 2013 Based on the last call, they seem to want to take advantage of the block exemption to buy big blocks. I'm hoping that maybe some of the volume from the past few days included some of these big blocks. They want big blocks and they want to preserve the liquidity and they want those big blocks cheap and they telegraph their intents. I doubt we will see anything significant from them. They will be focusing on 1) term out the debt and amortization. 2) work out with the Chinese customers on how to pay for the duties. 3) make the company free cash flow positive. They need to show the market that they are not burning the cash to zero. Buying the debt yield 20% ROI right off the bat. Buying common can be even more attractive depending on what the normalized DP price is.... Link to comment Share on other sites More sharing options...
jeffmori7 Posted November 20, 2013 Share Posted November 20, 2013 Based on the last call, they seem to want to take advantage of the block exemption to buy big blocks. I'm hoping that maybe some of the volume from the past few days included some of these big blocks. They want big blocks and they want to preserve the liquidity and they want those big blocks cheap and they telegraph their intents. I doubt we will see anything significant from them. They will be focusing on 1) term out the debt and amortization. 2) work out with the Chinese customers on how to pay for the duties. 3) make the company free cash flow positive. They need to show the market that they are not burning the cash to zero. Buying the debt yield 20% ROI right off the bat. Buying common can be even more attractive depending on what the normalized DP price is.... All of this probably means put LSQ on hold though. Should they keep their cash as they are still burning and they may eventually need it for LSQ or should they buy back now? What would you do if you were them now, in what order? Link to comment Share on other sites More sharing options...
obtuse_investor Posted November 20, 2013 Share Posted November 20, 2013 Thanks triedtested... Full set of normal course issuer bid rules: http://tmx.complinet.com/en/display/display_viewall.html?rbid=2073&element_id=614&record_id=658 It would be a full time job doing compliant issuer bids on the TSX. Here is the section on block purchases: Block Purchase Exception—A listed issuer may make one block purchase per calendar week which exceeds the daily repurchase restriction contained in subsection 628(a)(ix)(a) of the Company Manual, subject to maximum annual aggregate limits. Once the block purchase exception has been relied on, the listed issuer may not make any further purchases under the normal course issuer bid for the remainder of that calendar day. Link to comment Share on other sites More sharing options...
Liberty Posted November 20, 2013 Author Share Posted November 20, 2013 They want big blocks and they want to preserve the liquidity and they want those big blocks cheap and they telegraph their intents. I doubt we will see anything significant from them. I don't know. They said they sat down down with brokers from all sides and tried to make it happen. Maybe they just had too short a window to pull it together. I'm sure some big players have a few millions of the debs and want to get out, but daily volumes don't allow them to get out easily without raising the price a lot. Making a deal with the company for a block might please both parties, and so for that reason it might very well happen. We'll see. Link to comment Share on other sites More sharing options...
alertmeipp Posted November 20, 2013 Share Posted November 20, 2013 One question for you guys. Management said that they hope to be EBITBA break even for Dec this year. Do you know what DP price, etc... they are assuming? I think I heard them saying current price. For example, are they assuming DP price of $880 with Fortress paying all the duties or what? Assuming they are paying all the duties (around $115), their production cost will need to be around 765$ to break even. I didnt think they are there yet. Now if customer is willing to pay half... then it maybe do-able with $880 DP price. Thoughts? Link to comment Share on other sites More sharing options...
alertmeipp Posted November 20, 2013 Share Posted November 20, 2013 They want big blocks and they want to preserve the liquidity and they want those big blocks cheap and they telegraph their intents. I doubt we will see anything significant from them. I don't know. They said they sat down down with brokers from all sides and tried to make it happen. Maybe they just had too short a window to pull it together. I'm sure some big players have a few millions of the debs and want to get out, but daily volumes don't allow them to get out easily without raising the price a lot. Making a deal with the company for a block might please both parties, and so for that reason it might very well happen. We'll see. I hope you are right. That would make the depressing price worthwhile. I wish they take some commons too, 4 millions can get 5% of the float! Link to comment Share on other sites More sharing options...
alertmeipp Posted November 20, 2013 Share Posted November 20, 2013 Based on the last call, they seem to want to take advantage of the block exemption to buy big blocks. I'm hoping that maybe some of the volume from the past few days included some of these big blocks. They want big blocks and they want to preserve the liquidity and they want those big blocks cheap and they telegraph their intents. I doubt we will see anything significant from them. They will be focusing on 1) term out the debt and amortization. 2) work out with the Chinese customers on how to pay for the duties. 3) make the company free cash flow positive. They need to show the market that they are not burning the cash to zero. Buying the debt yield 20% ROI right off the bat. Buying common can be even more attractive depending on what the normalized DP price is.... All of this probably means put LSQ on hold though. Should they keep their cash as they are still burning and they may eventually need it for LSQ or should they buy back now? What would you do if you were them now, in what order? They are spending 100k per month on LSQ now, I think they said they put in 25 millions so far for LSQ and will keep spending that 100k until the final ruling. I don't think they will spending significant amount of its own money there. Not for commodities DP anyways, some mention the possibility of doing specialty DP with a partner. Wish they can get some sort of royalty deal there. Don't know what I would do if it were me, a tough one. Link to comment Share on other sites More sharing options...
jeffmori7 Posted November 20, 2013 Share Posted November 20, 2013 In La Presse+ this morning: http://plus.lapresse.ca/screens/4eb6-4080-528a3fee-8d07-5408ac1c606d%7C_0.html Sorry it is in French. Pelletier is saying that they were discussing the financing of LSQ with partners before the Chinese tax...if it is more than 5% for LSQ, won't pursue. Also, 6 companies, including Fortress are asking Quebec government to lower electricity rate for the pulp and paper industry. Link to comment Share on other sites More sharing options...
alertmeipp Posted November 20, 2013 Share Posted November 20, 2013 I used google translate: http://translate.google.com/translate?hl=en&sl=fr&tl=en&u=http%3A%2F%2Fplus.lapresse.ca%2Fscreens%2F4eb6-4080-528a3fee-8d07-5408ac1c606d%7C_0.html Seems to have some lost in translation: The article says: Fortress could live with a lower tax. "If we go down between 0 and 5%, it's manageable," said Yvon Pelletier, at least for the existing plant in Thurso. Does he mean if the duties go down 0-5%, Thurso is manageable? Or what does he mean? Link to comment Share on other sites More sharing options...
jeffmori7 Posted November 20, 2013 Share Posted November 20, 2013 Pelletier means a tax between 0 and 5% would be manageable! at least for Thurso. Link to comment Share on other sites More sharing options...
alertmeipp Posted November 20, 2013 Share Posted November 20, 2013 Pelletier means a tax between 0 and 5% would be manageable! at least for Thurso. LOL, that might help explaining the high volume sell off today. These guys need to show consistency and confidence. But I guess when you ask for cheaper gas price and lower wood price, you have to look broke. Link to comment Share on other sites More sharing options...
obtuse_investor Posted November 20, 2013 Share Posted November 20, 2013 Forestry’s elusive quest for innovation http://www.theglobeandmail.com/report-on-business/industry-news/energy-and-resources/forestrys-elusive-quest-for-innovation/article15515790/ Link to comment Share on other sites More sharing options...
alertmeipp Posted November 20, 2013 Share Posted November 20, 2013 wow, what a drop last few days. this is killing my YTD Link to comment Share on other sites More sharing options...
Liberty Posted November 20, 2013 Author Share Posted November 20, 2013 Now almost half the price of IPO over 6 years ago. I think this qualifies as a full blown panic. Link to comment Share on other sites More sharing options...
obtuse_investor Posted November 20, 2013 Share Posted November 20, 2013 Now almost half the price of IPO over 6 years ago. I think this qualifies as a full blown panic. Liberty, Not to be rude, but are we making a mistake anchoring on the IPO price? A lot has changed in this business in the last 6 years. Link to comment Share on other sites More sharing options...
FFHWatcher Posted November 20, 2013 Share Posted November 20, 2013 Now almost half the price of IPO over 6 years ago. I think this qualifies as a full blown panic. Panic - noun - sudden uncontrollable fear or anxiety, often causing wildly unthinking behaviour. That does not seem to be the case. It is more likely Ownership Bias where the stockholders are in denial of reality due to their ownership in the stock. Hopefully I am wrong and this turns out to be a great opportunity at this price. Link to comment Share on other sites More sharing options...
alertmeipp Posted November 20, 2013 Share Posted November 20, 2013 Now almost half the price of IPO over 6 years ago. I think this qualifies as a full blown panic. I can understand the panic, ppl just think dp price is going to be depressed for a long time. Link to comment Share on other sites More sharing options...
alertmeipp Posted November 20, 2013 Share Posted November 20, 2013 Now almost half the price of IPO over 6 years ago. I think this qualifies as a full blown panic. Panic - noun - sudden uncontrollable fear or anxiety, often causing wildly unthinking behaviour. That does not seem to be the case. It is more likely Ownership Bias where the stockholders are in denial of reality due to their ownership in the stock. Hopefully I am wrong and this turns out to be a great opportunity at this price. i think it is irrational to think thurso will not be profitable. the drop is probably coz of cibc downgrade. they are the bullish one Link to comment Share on other sites More sharing options...
Liberty Posted November 20, 2013 Author Share Posted November 20, 2013 Now almost half the price of IPO over 6 years ago. I think this qualifies as a full blown panic. Liberty, Not to be rude, but are we making a mistake anchoring on the IPO price? A lot has changed in this business in the last 6 years. I was saying those as two different things. (I realize now it looked like the same idea, sorry for the confusion) 1) It's about half of IPO price now. 2) The recent price action seems like a full-blown capitulation. I'm not saying it's totally irrational; lots of negative stuff, of course. But even if they scrap LSQ, they have lots of cash on the balance sheet, thurso should keep getting better quarter by quarter, the tariffs should reduce supply and hopefully help DP price firm up, and landquart is finally starting to look like less of a black hole, maybe even sellable at some point (I wonder what the intangibles like patents and customer relationships would be worth to a 'strategic' buyer in the industry?). Link to comment Share on other sites More sharing options...
lessthaniv Posted November 20, 2013 Share Posted November 20, 2013 the company can buy in 10% of its float 1,202,860 for $5.1M today at these prices. Link to comment Share on other sites More sharing options...
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