undervalued Posted July 22, 2015 Share Posted July 22, 2015 It looks like there is some discrepancy between dataroma/whalewisdom data vs the number in SEC. In Dataroma, it says Pabrai has 6,333,296 at 31 March 2015. Before his latest purchase on 7/20/2015. He has 6,431,560 which is (6,572,573 - 141013). http://www.sec.gov/Archives/edgar/data/1385544/000154692715000204/xslF345X03/pabraizincform472215filedv2.xml Link to comment Share on other sites More sharing options...
abitofvalue Posted July 23, 2015 Share Posted July 23, 2015 My guess is the difference has to do with Dalal Street holdings vs holdings in other accounts managed by him. The 6.33M number is from Dalal Street's 13F. The 6.43M number probably includes other ZINC shares held by accounts that are controlled by Pabrai. Either way he now owns / controls 7M shares. Link to comment Share on other sites More sharing options...
Homestead31 Posted July 24, 2015 Share Posted July 24, 2015 either way it seems like there were more than a few people waiting for Pabrai to tell them what to do, so now you know! (crazy to buy a stock w/o doing your own work) Link to comment Share on other sites More sharing options...
Investmentacct Posted July 24, 2015 Share Posted July 24, 2015 > (crazy to buy a stock w/o doing your own work) Everyone is not old enough to remember Delta financial (DFC). https://en.wikipedia.org/wiki/Delta_Financial_Corporation Link to comment Share on other sites More sharing options...
ccap Posted July 24, 2015 Share Posted July 24, 2015 > (crazy to buy a stock w/o doing your own work) Everyone is not old enough to remember Delta financial (DFC). https://en.wikipedia.org/wiki/Delta_Financial_Corporation From watching this thread, I think there is a mixture of: 1) people who haven't done enough homework to convince themselves one way or another and 2) the psychological bias we all have against buying things when they go down. As much as we may say that we're tough as nails and it doesn't bother us to buy more on the way down, it bothers us all to some degree. Pabrai's buy probably makes both groups more likely to feel better about buying. Link to comment Share on other sites More sharing options...
LC Posted July 24, 2015 Share Posted July 24, 2015 Seems here the risks/uncertainties are more tangible than a financial firm, which is why I think people jumped on board with less hesitation. Link to comment Share on other sites More sharing options...
Mephistopheles Posted July 24, 2015 Share Posted July 24, 2015 I owned a small amount of this last year. I like that they have such a large share of the market, and the economics of EAF recycling are also interesting. I sold because I didn't like the debt load; uncertainties about the new plant; and because they are too dilutive for my taste with their executive compensation. I got lucky and got out before problems started to emerge and they needed the equity raise. Longer term I am curious to know - why is it advantageous for mini-mills to stay in the U.S.? What's stopping the industry from moving to cheaper countries over time? Obviously ZINC has an advantage by being near the mills but if the mills themselves are not sustainable here, that would be a problem. I don't know much about this so would love to hear other opinions. Link to comment Share on other sites More sharing options...
cmlber Posted July 25, 2015 Share Posted July 25, 2015 I owned a small amount of this last year. I like that they have such a large share of the market, and the economics of EAF recycling are also interesting. I sold because I didn't like the debt load; uncertainties about the new plant; and because they are too dilutive for my taste with their executive compensation. I got lucky and got out before problems started to emerge and they needed the equity raise. Longer term I am curious to know - why is it advantageous for mini-mills to stay in the U.S.? What's stopping the industry from moving to cheaper countries over time? Obviously ZINC has an advantage by being near the mills but if the mills themselves are not sustainable here, that would be a problem. I don't know much about this so would love to hear other opinions. That will never happen. Mini-mill's are local businesses. Steel is heavy and expensive to transport. Mini-mill's get double hit by this because they recycle local scrap. A plant in Arkansas can take junkyard scrap, process it, and sell rebar to local construction companies. No transport costs. A plant in China would have to transport the scrap from Arkansas to China, just to process it and send it back from China to Arkansas. That cost is WAY more than the labor savings. Nucor's labor was 8% of sales last year, with a price per ton of $830. That's $67/ton labor. A recent WSJ article implied transportation costs on Chinese steel imports were $69/ton, for a mini-mill you would pay that twice. Not to mention energy is 6% of costs, or $50/ton, for Nucor, and US natural gas prices are a big advantage there. Link to comment Share on other sites More sharing options...
karthikpm Posted July 25, 2015 Share Posted July 25, 2015 http://online.barrons.com/articles/zinc-resists-selloff-in-industrial-metals-1437807184 ZINC has always held they are not highly reliant on the price of the commodity, but a reliant price of the metal should help the case Link to comment Share on other sites More sharing options...
Mephistopheles Posted July 25, 2015 Share Posted July 25, 2015 I owned a small amount of this last year. I like that they have such a large share of the market, and the economics of EAF recycling are also interesting. I sold because I didn't like the debt load; uncertainties about the new plant; and because they are too dilutive for my taste with their executive compensation. I got lucky and got out before problems started to emerge and they needed the equity raise. Longer term I am curious to know - why is it advantageous for mini-mills to stay in the U.S.? What's stopping the industry from moving to cheaper countries over time? Obviously ZINC has an advantage by being near the mills but if the mills themselves are not sustainable here, that would be a problem. I don't know much about this so would love to hear other opinions. That will never happen. Mini-mill's are local businesses. Steel is heavy and expensive to transport. Mini-mill's get double hit by this because they recycle local scrap. A plant in Arkansas can take junkyard scrap, process it, and sell rebar to local construction companies. No transport costs. A plant in China would have to transport the scrap from Arkansas to China, just to process it and send it back from China to Arkansas. That cost is WAY more than the labor savings. Nucor's labor was 8% of sales last year, with a price per ton of $830. That's $67/ton labor. A recent WSJ article implied transportation costs on Chinese steel imports were $69/ton, for a mini-mill you would pay that twice. Not to mention energy is 6% of costs, or $50/ton, for Nucor, and US natural gas prices are a big advantage there. Makes a lot of sense, thank you! Link to comment Share on other sites More sharing options...
merkhet Posted July 25, 2015 Share Posted July 25, 2015 Let's not forget that it would also take a while for the steel to get here from China. Link to comment Share on other sites More sharing options...
kevin4u2 Posted July 25, 2015 Share Posted July 25, 2015 Let's also not forget that steel plate sells for $600 per ton in the USA and $300 per ton in China right now, cheaper that cabbage. Let's not forget that it would also take a while for the steel to get here from China. Link to comment Share on other sites More sharing options...
B_RK14 Posted July 28, 2015 Share Posted July 28, 2015 Yes, they will need a capital raise if you don't think they have enough cash on hand. They raised 70M in Q1 and burned through roughly 15M. Just based off of Q1 and having 85M on hand, gives them roughly a year and half of cash if operating at same rate as Q1. I believe that over that year and a half production will pick up enough to relieve the cash burn and extend the time they have giving them 2 years till the debt comes due. I've got some rose to my glasses, so maybe there is a learning experience on the horizon. Time will tell. Hi Spartansaver, Out of curiosity, could you walk me through how you got the $15mn/quarter burn-rate figure from? Thanks. Link to comment Share on other sites More sharing options...
spartansaver Posted July 28, 2015 Share Posted July 28, 2015 Yes, they will need a capital raise if you don't think they have enough cash on hand. They raised 70M in Q1 and burned through roughly 15M. Just based off of Q1 and having 85M on hand, gives them roughly a year and half of cash if operating at same rate as Q1. I believe that over that year and a half production will pick up enough to relieve the cash burn and extend the time they have giving them 2 years till the debt comes due. I've got some rose to my glasses, so maybe there is a learning experience on the horizon. Time will tell. Hi Spartansaver, Out of curiosity, could you walk me through how you got the $15mn/quarter burn-rate figure from? Thanks. I was not doing anything fancy, they raised roughly 70M in equity. The debt and liabilites raised/paid down were close to a wash and began the Q with 30M in cash and ended it with 85M. Very back of the napkin, 30M + 70M -85M = 15M it may be slightly higher although I just wanted to keep it simple. Link to comment Share on other sites More sharing options...
cmlber Posted July 29, 2015 Share Posted July 29, 2015 Pabrai bought another ~470k shares the last three days, new Form 4 filed. Link to comment Share on other sites More sharing options...
Guest MarkS Posted July 30, 2015 Share Posted July 30, 2015 I read today that a Board Member - Dalal Street - purchased about $3.8M of stock in the open market. Link to comment Share on other sites More sharing options...
RadMan24 Posted July 30, 2015 Share Posted July 30, 2015 I read today that a Board Member - Dalal Street - purchased about $3.8M of stock in the open market. That's Pabrai. Owns 10%. Link to comment Share on other sites More sharing options...
bergman104 Posted July 30, 2015 Share Posted July 30, 2015 Unless I'm making a mistake, Pabrai now owns more than 13% of the company. Curious to see how high he takes his ownership levels, especially if the stock takes another dip down. Link to comment Share on other sites More sharing options...
newbee Posted July 30, 2015 Share Posted July 30, 2015 https://finance.yahoo.com/news/long-term-puts-target-horsehead-104526625.html Someone is making a big bet that the stock will be less than $6.40 in march 16, by buying a huge put option. Link to comment Share on other sites More sharing options...
benhacker Posted July 30, 2015 Share Posted July 30, 2015 Someone is making a big bet that the stock will be less than $6.40 in march 16, by buying a huge put option. I don't know the ZINC situation specifically, but I would guess this is someone putting on an arb with the converts. Something all stock longs should seriously consider as an alternative to the common at these prices. '17 converts yield >10% and provide common upside after a point, and should protect against any extreme dilution to common which I would imagine is not inconceivable... Link to comment Share on other sites More sharing options...
RadMan24 Posted July 30, 2015 Share Posted July 30, 2015 Someone is making a big bet that the stock will be less than $6.40 in march 16, by buying a huge put option. I don't know the ZINC situation specifically, but I would guess this is someone putting on an arb with the converts. Something all stock longs should seriously consider as an alternative to the common at these prices. '17 converts yield >10% and provide common upside after a point, and should protect against any extreme dilution to common which I would imagine is not inconceivable... I would argue any further delays or failure to turn the plant to a profit would be just as harmful to the bonds, making them yield 20% or more for the new found risk. Really no protection in owning a bond in this situation at the current price/yield. Liquidity is fine for another 4 or so quarters. That's a long time just to iron out some kinks. I got my money on it working out okay, small bet though. Link to comment Share on other sites More sharing options...
jimjam Posted August 7, 2015 Share Posted August 7, 2015 2015 Q2 results are out. Still lots of problems to resolve in Moorseboro... http://www.horsehead.net/financial_news.php?showall=&FinancialNews=&ID=153 Pittsburgh, PA, August 7, 2015 -- Horsehead Holding Corp. (Nasdaq: ZINC) reported a consolidated net loss of $3.6 million, or $(0.06) per diluted share, for the second quarter of 2015 compared to a consolidated net loss of $5.1 million, or $(0.10) per diluted share, for the second quarter of 2014. Results for the quarter, adjusted to exclude favorable non-cash adjustments associated with hedges, was a consolidated net loss of $12.4 million, or $(0.22) per diluted share, compared to a consolidated net loss on the same basis of $3.2 million for the second quarter of 2014, or $(0.06) per diluted share. "The quarter reflected lower shipments of zinc metal compared with the prior year's quarter due, in part, to the sale of the remaining inventory from the Monaca, Pennsylvania facility in the prior year's quarter. The shortfall in shipments was partially offset by continued solid demand for our zinc calcine, completion of the sale of the Monaca property and higher LME zinc prices. Production of finished zinc products increased 7.6% compared with the prior year's quarter reflecting the transition of zinc production from the Monaca smelter to the Mooresboro facility in the prior year's quarter," said Jim Hensler, President and Chief Executive Officer. Mooresboro Status "Our primary focus during the quarter was the continued ramp-up of the Mooresboro facility. The facility produced approximately 10,600 tons of zinc metal during the quarter, a 10% improvement versus the first quarter of 2015. We continued to supplement our zinc metal shipments with the sale of approximately 28,000 tons of zinc calcine during the second quarter. The total quantity of zinc contained in all product shipments, including Zochem, during the quarter was 46,418 tons, an amount which was 10.8% higher than the first quarter of 2015." "The pace of the ramp-up increased as we exited the second quarter and in July, a month in which we took a planned outage, the facility produced approximately 4,000 tons of zinc metal, a 7% increase over June's production. Upgrades made during the planned outage, along with the additional processing capacity supplied by Veolia (a water treatment specialist), have eased the bottleneck in our bleed treatment circuit. We also made progress on the previously mentioned pilot plant designed to quickly add and evaluate incremental bleed treatment capacity. We expect it to be operational sometime in August. We expected better performance in July; however, we experienced unexpected production constraints due to equipment reliability issues, caused mainly by design deficiencies, some of which we have already remedied. We are encouraged that the operations in Mooresboro appear to have stabilized over the past quarter. We expect continued steady progress as we debottleneck the facility and systematically address equipment reliability issues. We continue to believe that, once the Mooresboro facility is fully and efficiently operating, we will realize $90 to $110 million of incremental Adjusted EBITDA compared to our prior operations at Monaca. However, the timing for achieving specific milestones during the ramp-up or the completion of the ramp-up cannot be predicted with certainty," added Hensler. Second Quarter Highlights Compared to the same quarter last year: Zinc finished product and calcine shipments, on a zinc contained basis, decreased 8,633 tons, or 15.7%, to 46,418 tons for the quarter, comprised of 29,017 zinc tons of finished products and 17,401 zinc tons in calcine. EAF dust receipts decreased 10.7% to 134,511 tons, primarily reflecting reduced industry steel production. The LME zinc price averaged $0.99/lb for the second quarter of 2015 and $0.94/lb for the second quarter of 2014. The LME nickel price averaged $5.90/lb for the second quarter of 2015 compared to $8.38/lb for the second quarter of 2014. Net sales, excluding non-cash hedge effects, decreased $16.0 million, or 12.4%, to $112.7 million, reflecting the effect of reduced shipment volumes of finished zinc products and zinc calcine, partially offset by increased sales of nickel-based products and services and a 5.6% higher LME zinc price. Price realization for finished zinc products on a zinc-contained basis reflected a $0.20/lb premium to the average LME zinc price for the quarter consistent with the prior year quarter. Sales for the second quarter of 2015 included $10.1 million of unrealized gains associated with hedge positions compared to $2.5 million of unrealized losses in the prior year quarter. Cost of sales were $108.2 million, a $7.9 million decrease from the prior year's quarter, as the effect of reduced shipments of finished zinc products was partially offset by startup costs at the Mooresboro facility. Cost of sales for the second quarter included a lower-of-cost-or-market charge of $1.3 million to reflect the lower LME zinc price at June 30, 2015. Other income increased $12.0 million for the quarter primarily reflecting the gain on the sale of the Monaca property to Shell. Cash used by operating activities was $27.4 million for the quarter ended June 30, 2015, as accounts payable and accrued expenses decreased $6.2 million and inventories and accounts receivable increased $13.3 million during the quarter. Capital spending was $10.1 million for the quarter and the net proceeds received during the quarter for the sale of the Monaca property was $9.0 million. Cash on hand and availability on our credit facilities totaled $53.9 million at the end of the quarter. In July, we completed a refinancing of two of our credit facilities, adding approximately $30 million of additional liquidity. We believe we have adequate liquidity to meet the capital needs of the business through completion of the ramp-up of the Mooresboro facility. ... Link to comment Share on other sites More sharing options...
supertutti Posted August 7, 2015 Share Posted August 7, 2015 What are your thoughts? The stock is up, but to me it feels like the same old message every quarter. Link to comment Share on other sites More sharing options...
rsmehta Posted August 7, 2015 Share Posted August 7, 2015 I think this is a more encouraging update to be honest. I also expected the loss to be much higher. Link to comment Share on other sites More sharing options...
abitofvalue Posted August 7, 2015 Share Posted August 7, 2015 I am feeling too lazy to actually check this right now - but doesn't it seem like "pace of the ramp up increased as we exit the quarter" every quarter. Followerd by a "planned outage" early in the next quarter. ??? Overall, looks like an OK update - really more of the same. fixed some issues --> found new issues -->already fixed some of them, working on others --> still think we get ~$100M incremental EBITDA, but don't ask us when. Link to comment Share on other sites More sharing options...
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