walt373 Posted September 12, 2013 Share Posted September 12, 2013 Every Tom Dick and Harry holding bonds will want to join in on this. Looks like curtains for the holding co... Link to comment Share on other sites More sharing options...
Hielko Posted September 13, 2013 Share Posted September 13, 2013 They won: http://www.bloomberg.com/news/2013-09-13/suntech-noteholders-win-ruling-on-claim-lawyer-says.html?cmpid=yhoo Wonder what's next. Link to comment Share on other sites More sharing options...
constructive Posted September 13, 2013 Share Posted September 13, 2013 http://ir.suntech-power.com/phoenix.zhtml?c=192654&p=irol-newsArticle&ID=1854686&highlight= New CEO Weiping Zhou joined Suntech in March as President and Director. Prior to that he was a senior manager with Wuxi Guolian Development Group, a real estate and securities business owned by the city of Wuxi. It is rumored that Suntech may sell substantial amounts of assets to Guolian as part of the restructuring process. Should investors trust Zhou to negotiate an arm's length transaction with his former colleagues, or with Chinese banks? Is he motivated to create value for US shareholders? Today's price action is as usual mystifying. Link to comment Share on other sites More sharing options...
danconia17 Posted September 13, 2013 Share Posted September 13, 2013 does anyone have a good idea how many shares in the float? there are only 15mm shares short, yet this is impossible to locate a borrow... could the reason this stock stays up b/c this is one big circle jerk of guys getting bought in?? Link to comment Share on other sites More sharing options...
walt373 Posted September 13, 2013 Share Posted September 13, 2013 Good question. I have always wondered why the shares are so hard to borrow and the cost is so high. Yahoo says float is 129.68M and the largest holder is CALPERS, who owns only 0.95% of outstanding shares. Could a lot of shareholders be holding them in cash accounts, or aren't allowing their shares to be borrowed? Why would you not want to get paid that borrow fee though? Seems odd. Link to comment Share on other sites More sharing options...
Hielko Posted September 13, 2013 Share Posted September 13, 2013 I think exactly because the largest holders own less than 1% is that the stock is so hard to borrow. Probably a lot of retail money in this name with accounts that don't support share lending. Link to comment Share on other sites More sharing options...
Olmsted Posted September 14, 2013 Share Posted September 14, 2013 does anyone have a good idea how many shares in the float? there are only 15mm shares short, yet this is impossible to locate a borrow... could the reason this stock stays up b/c this is one big circle jerk of guys getting bought in?? That is essentially my working hypothesis. That and the shares are lucrative to lend, so it could make sense to own if you had a view that bankruptcy will take longer than the shorts anticipate. I know, it's a bit of a stretch but I'm grasping at straws to try to comprehend the incomprehensible. Link to comment Share on other sites More sharing options...
APG12 Posted September 16, 2013 Share Posted September 16, 2013 That was my hypothesis as well. Bankruptcies can take years to play out. That's why I purchased the Jan 1 2015 puts. The payouts weren't that different from the shorter term options if you thought the equity was going to ~$ 0.10 or less. I also owned Sept. 21 2013 puts but I realized that the stock probably wasn't going to react rationally to any fundamental data. I was able to sell out of my position at a 20% loss, which given the massive /ask spreads, I didn't think was too bad. I also recognized that this was totally speculative and Ben Graham would have walloped me for putting money on such a bet. It was a very small portion of my account. ;) In any event, until we know exactly what is causing the price to remain so high and what actions creditors will take in light of the Trondheim ruling, there is some timing risk here. Link to comment Share on other sites More sharing options...
walt373 Posted September 25, 2013 Share Posted September 25, 2013 Per Credit Bubble Stocks, the final judgement has been entered against Suntech (http://www.creditbubblestocks.com/2013/09/final-judgments-entered-against-suntech.html), and collection efforts can now begin. So Suntech will either have to declare bankruptcy or have their US assets seized. However, even bankruptcy might not prevent payment. See the first couple of comments here: http://www.blogger.com/comment.g?blogID=1527840491496268397&postID=5154543852112230424. I'm not really sure what the implications of that are. Sounds like Chapter 15 doesn't give them protection against the judgement but maybe Ch 7 or 11 does? This throws a wrench into their restructuring plan, and might be why we have not heard anything about that since the initial PR. Why would a strategic investor inject cash into the holding company if bondholders can sue Suntech following the Trondheim precedent and receive full payment for their bonds? Essentially, the strategic investor would be buying the defaulted bonds for 100 cents on the dollar. Now, it would only make sense for a strategic investor to enter if Suntech declares bankruptcy first. Link to comment Share on other sites More sharing options...
APG12 Posted September 25, 2013 Share Posted September 25, 2013 Exactly! There's no reason for the strategic investor to purchase any equity now. Anyways, as with any bankruptcy there are a thousand variables that can be analyzed. I think it only takes common sense to see that the equity is darn near worthless. Directors jumping ship, Italians seizing assets, bankruptcy in multiple jurisdictions, US operations shut down, etc. The only value I see in analysis at this point is if it helps us foresee the timing of dilution. Maybe it could be argued that shorts would have been better off with a voluntary restructuring as the actual dilution would've occurred sooner. THAT would be ironic for Trondheim! :o Either way, following this story (and all of its twists and turns) has been pretty fun. Link to comment Share on other sites More sharing options...
walt373 Posted September 26, 2013 Share Posted September 26, 2013 Yes I agree, there is the possibility that suing them might backfire. I actually think a debt-equity swap would have a higher chance of cratering the stock price, since bringing in all the bondholders would pretty much guarantee a ton of selling pressure. Assuming 95% dilution, bonds trading at 25 cents on the dollar would be worth about 4 cents in converted stock, so I think you could safely say that bondholders would be very happy to sell for anything much higher than that. Can't really say the same about a bankruptcy though, since the stock currently seems disconnected from fundamentals, and a lot of people who would be forced sellers in a bankruptcy have already exited the stock (for example, the largest ETF holders sold in March). I'm guessing the stock will still fall if they declare bankruptcy, but it might fall less than expected, and might take longer to reach the 5-10 cent range that I'm hoping for. Can't blame Trondheim for trying though, since Suntech has been stringing along bondholders for months and there's no telling how long they would've continued doing so. I think being in control of the situation is worth it. Now, Trondheim is in the catbird seat, with the potential to make 4x on their bond investment (improbable but still cool) while gaining control of their short position (guessing they are). Link to comment Share on other sites More sharing options...
danconia17 Posted October 3, 2013 Share Posted October 3, 2013 Any new thoughts? Stock has now rallied to 1.60! It's astonishing. What's the end game scenarios now? There's money to be had in buying puts, but the timing is key. Sadly, i have no insight now. I would have thought any one of the news articles would have caused the stock to crater, let alone all of them. Yet here we are with the bond/stock divergence as wide as ever. I wish some of my longs defaulted on their debt and said they were going to do an equitization so I too could get a 60%+ move higher. Link to comment Share on other sites More sharing options...
LC Posted October 9, 2013 Share Posted October 9, 2013 Italian assets siezed: http://www.sec.gov/Archives/edgar/data/1342803/000110465913071735/a13-21176_1ex99d1.htm Link to comment Share on other sites More sharing options...
Hielko Posted October 9, 2013 Share Posted October 9, 2013 This is more interesting: http://www.bloomberg.com/news/2013-10-09/shunfeng-photovoltaic-rises-on-suntech-unit-bid-hong-kong-mover.html Unit Jiangsu Shunfeng Photovoltaic Technology Co. made a bid to acquire stock in Wuxi Suntech Power Co., which makes solar cells and panels, according to a statement to the Hong Kong stock exchange. Shunfeng has paid a deposit of 500 million yuan ($82 million) to the administrator of Wuxi Suntech, which is refundable should the bid fail. I think it's a safe bet that whatever they are bidding is way below the almost 2 billion in bank debt that is at the Wuxi subsidiary, and without it most of the company is basically gone. Link to comment Share on other sites More sharing options...
T-bone1 Posted October 9, 2013 Author Share Posted October 9, 2013 I agree. New article: http://stream.wsj.com/story/latest-headlines/SS-2-63399/SS-2-350082/ (long puts) Link to comment Share on other sites More sharing options...
APG12 Posted October 12, 2013 Share Posted October 12, 2013 Italians have seized more assets. This thing continues to spiral out of control: http://finance.yahoo.com/news/suntech-announces-updates-gsf-assets-233100187.html Link to comment Share on other sites More sharing options...
walt373 Posted October 12, 2013 Share Posted October 12, 2013 Here's the Trondheim vs Suntech judgement hearing transcript if anyone is interested: http://www.scribd.com/doc/175613875/Trondheim-Doc-19-Transcript. The judge basically shuts the Suntech lawyer down. Here's an excerpt: THE COURT: You know, I knew Mr. Mintz. MR. SAMBERG: Pardon me? THE COURT: I knew Mr. Mintz. And he was a man of high character. I don't think he would engage in this kind of a -- of a defense. Link to comment Share on other sites More sharing options...
LC Posted October 13, 2013 Share Posted October 13, 2013 Thanks for posting, walt Link to comment Share on other sites More sharing options...
JBird Posted October 13, 2013 Share Posted October 13, 2013 THE COURT: -- but this is what lawyers get a bad reputation for. Hahaha Link to comment Share on other sites More sharing options...
walt373 Posted October 14, 2013 Share Posted October 14, 2013 Trondheim files involuntary BK petition against STP http://www.scribd.com/doc/176116672/show-temp Link to comment Share on other sites More sharing options...
constructive Posted October 14, 2013 Share Posted October 14, 2013 Looks like the end game is fast approaching. You don't see involuntary BK petitions against NYSE listed stocks every day. Link to comment Share on other sites More sharing options...
APG12 Posted October 25, 2013 Share Posted October 25, 2013 http://finance.yahoo.com/news/shunfeng-inks-preliminary-restructuring-deal-024954265.html Link to comment Share on other sites More sharing options...
walt373 Posted October 25, 2013 Share Posted October 25, 2013 As it becomes more obvious the holding company is worthless, bondholders become more incentivized to keep STP out of bankruptcy. Why declare bankruptcy if you are not going to recover anything? At least right now you can point to the NYSE-listed stock trading at $250mil, and there is the possibility to swap your bonds for equity. Declaring bankruptcy would result in a total loss for bondholders. However, Trondheim is forcing the issue with involuntary bankruptcy, so they may not have a choice now. Link to comment Share on other sites More sharing options...
walt373 Posted November 7, 2013 Share Posted November 7, 2013 Here are some recent docs: http://www.scribd.com/doc/182363157/SDNY-Bk-Doc-12-MOL-in-Support-of-Dismissal http://www.scribd.com/doc/182363187/SDNY-Bk-Doc-13-2-Nacson-Affidavit Link to comment Share on other sites More sharing options...
JBird Posted November 7, 2013 Share Posted November 7, 2013 What happens to your put position when the shares are delisted? Link to comment Share on other sites More sharing options...
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