ZINC - Horsehead Holding Corp

[str8shot]

Can we sum up the mistakes listed by those losing 95% with the following?

 

1. Not doing your own homework and

2. not changing your opinion despite the value building facts changing

 

I'd add a third mistake (I was also guilty of until one or two years ago): Investing into commodity companies without a clear macro view. But I think most people here would disagree with this one.

 

Number 1 is impossible.  How do you do your "homework" on a commodity investment?  To do this you need to first estimate the revenue for the next ten years.  For commodity companies this is easy and involves two factors, production level and price.  You can do your homework on production but price is impossible.  Thus when you multiply production (which is where most people were also wrong) times the price (which is totally unknown), the result, if you are honest, is I have no idea.  Homework is thus impossible for most commodity companies. 

 

This is why Buffett does not invest in commodity companies.  When he talks about "circle of competence", that does not mean he doesn't understand how a commodity is produced (ie how to get oil out of the ground)... it is that he understands the assumptions in his thinking and stops the analysis when he comes to a point where he doesn't know.  Munger calls this being "rational".

 

***The only way around the unknown wildcard of price is to speculate or buy the lowest cost producer.  The lowest cost producer will be the last man standing.

 

Buffett does invest in commodity related companies - for example he's currently ramping up his investment in Phillips 66:

>“We’re not buying it as a refiner and we’re certainly not buying it as an integrated oil company,” Buffett told CNBC last September. “We’re buying it because we like the company and we like the management very much.” (Source: “Warren Buffett talks Phillips 66 stake,” CNBC, February 1, 2016.)

 

Buffett has said "we like to invest in a business an idiot could run because one day one might."

 

Regarding circle of competence, and speaking as someone who worked in senior management at IBM Global Services for nearly 10 years, I couldn't understand for the life of me why Buffett invested in IBM years back when the stock was $190-200. The company was clearly burdened by the need to transition from being a hardware business to being a services, software and cloud based business. It has been like an aircraft carrier trying to turn itself around. It may get there eventually but it's going to be a long road and the stock is at $120 today.

 

Inexplicably Buffett never invested in Microsoft in the 90's despite being great friends with Gates - when Microsoft had a 85% plus market share in essential PC software and was printing money quarter after quarter - because he said it was beyond his circle. How did IBM end up within his circle years later? And he clearly has misread IBM.

 

This brings to mind the famous Emerson quote "A foolish consistency is the hobgoblin of little minds, adored by little statesmen and philosophers and divines. With consistency a great soul has simply nothing to do. He may as well concern himself with his shadow on the wall."

[RadMan24]

Buffett first invented in IBM around $170, and wanted the price to stay low, he has stated that he is not worried about IBM's turnaround at this point.

 

Further, Buffett stated before he didn't invest in Microsoft was because he was good friends with Bill Gates and didn't want to create any kind of conflict of interest, including the appearance of one.

 

Moreover, Phillips 66 is ramping up its midstream and chemical segments, that stand to benefit tremendously from the energy boom we've had in the U.S.. Whether it is to transport oil, nat gas, or NGLs, around, to export it them, or to use cheap feedstock to fuel the chemicals business, the company has a lot going on for it.

 

 

[ni-co]

Reply point by point to the above:

1. I did my own homework big time. AND analyzed/discussed execution, risks, liquidity, etc. with other investors thoroughly, including Spier face to face. The big lesson for me: DO NOT invest in a company in a crappy industry subject to rapid changes in prices unless A) the company has a sustainable competitive advantage (e.g., low cost producer in US that is hard to duplicate) AND B) it is already executing well on that advantage (i.e., it has a plant already running near capacity so that the break even cash flow requirement is well below market prices) AND C) it has sufficient liquidity to weather a major cycle downturn. ZINC met criteria A, but not B and C. In retrospect it was a no-brainer to pass on this investment until it actually met all three.

 

My question implied that you draw some conclusions from your homework. 20/20 is always easy but at least after the equity offering it was clear that ZINC was very short of cash and credit and was therefore a hugely risky investment. I don't agree that you must not invest in such companies but, by all means, adjust your position size to reflect that risk.

 

That said, I don't want to make light of anyone – I'm seriously sorry that some board fellows lost a large amount of money with ZINC. Just trying to help with the analysis of what went wrong.

 

Re Buffett's commodity investments, I've been saying this in other threads, too: I think Buffett is dishonest about not considering macro when investing into those companies. Why did he sell Exxon? Had it really become a worse company? You have to carefully pay attention to the difference between what he's saying and actually doing if you like to clone him.

[str8shot]

Buffett first invented in IBM around $170, and wanted the price to stay low, he has stated that he is not worried about IBM's turnaround at this point.

 

Further, Buffett stated before he didn't invest in Microsoft was because he was good friends with Bill Gates and didn't want to create any kind of conflict of interest, including the appearance of one.

 

Moreover, Phillips 66 is ramping up its midstream and chemical segments, that stand to benefit tremendously from the energy boom we've had in the U.S.. Whether it is to transport oil, nat gas, or NGLs, around, to export it them, or to use cheap feedstock to fuel the chemicals business, the company has a lot going on for it.

 

to your first point, yes he did originally get in around $170 starting in Q1 2011 but added to it as it went up, and then more as it went down over time. His cost is around $165 per share, and as of November 2015 when the stock was $140 he'd lost $2B (%15) on the investment to date. He's now down nearly 30%. I'm not saying it won't rise in the future but he's been in the stock for 5 years. I left IBM in early 2011 and all I could conclude when he bought it was that he might not be aware that he was buying an aircraft carrier with a stodgy, hardware sales dominated culture that was likely going to take a very long time to turn itself around.

 

To your second point, yes in recent years Buffett has cited his friendship with Gates as the reason and I'm not questioning his integrity. At the same time he offered a different reason in the the 90's, and specifically in '99, during his Berkshire annual meeting, Buffett informed shareholders that he was sticking with companies like Coca-Cola and Gillette, despite the fact that that both stocks had taken a beating in recent months. “I think it’s much easier to predict the relative strength that Coke will have in the soft drink world than Microsoft will in the software world,” Buffett said. “That’s not to knock Microsoft. If I had to bet on anyone, I’d bet on Microsoft. But I don’t have to bet.” So I think each of us has a point on this one.

 

To your third point I agree the company has good upside potential - that's obviously why Buffett is in it. I was merely pointing to the fact that he'll play in the commodity/materials sector if he sees a good opportunity.

[str8shot]

Reply point by point to the above:

1. I did my own homework big time. AND analyzed/discussed execution, risks, liquidity, etc. with other investors thoroughly, including Spier face to face. The big lesson for me: DO NOT invest in a company in a crappy industry subject to rapid changes in prices unless A) the company has a sustainable competitive advantage (e.g., low cost producer in US that is hard to duplicate) AND B) it is already executing well on that advantage (i.e., it has a plant already running near capacity so that the break even cash flow requirement is well below market prices) AND C) it has sufficient liquidity to weather a major cycle downturn. ZINC met criteria A, but not B and C. In retrospect it was a no-brainer to pass on this investment until it actually met all three.

 

My question implied that you draw some conclusions from your homework. 20/20 is always easy but at least after the equity offering it was clear that ZINC was very short of cash and credit and was therefore a hugely risky investment. I don't agree that you must not invest in such companies but, by all means, adjust your position size to reflect that risk.

 

That said, I don't want to make light of anyone – I'm seriously sorry that some board fellows lost a large amount of money with ZINC. Just trying to help with the analysis of what went wrong.

 

Re Buffett's commodity investments, I've been saying this in other threads, too: I think Buffett is dishonest about not considering macro when investing into those companies. Why did he sell Exxon? Had it really become a worse company? You have to carefully pay attention to the difference between what he's saying and actually doing if you like to clone him.

 

thanks for your reply. i agree that the equity raise in Jan 2015 was a red flag but also recognize that at that time 1) zinc prices were above $1 with no indication of the coming crash 2) mgmt was very clear that they expected to hit at least 75% capacity by Q2 (which then became Q3 and subsequently proved to be a pipe dream) and 3) related to point 2, mgmt was very clear that with the equity raise they had ample liquidity to bridge the ramp-up (another pipe dream), and 4) INMETCO and ZOCHEM were generating good cash flows. Granted it was plainly naive in retrospect to have any faith in mgmt's projections - but if the commodity crash hadn't occurred maybe they would have been able to raise more funds and stumble their way to the finish. who knows. regardless my overriding point is don't bet on the come when they haven't yet demonstrated successful implementation of a critical complex project - the ramp-up of the Moorseboro plant.

 

i agree that even as of Jan 2015 if one looked more deeply, it was clear that it was pretty damn risky despite the counterpoints above. i find it incomprehensible that mgmt did not raise significant additional equity and debt capital in early 2015 to mitigate any prospective downturn in the commodity markets as well as continued stumbles on the ramp-up. instead they were playing the "we have just enough funding if everyone goes right game", and frankly that was not evident to me in early 2015. not getting out later in 2015 for me was more psychological than logical - it was putting faith in Pabria's doubling down - which supported my bias not to want to admit I was wrong. Instead of finding reasons to take my loss and sell, i was emphasizing reasons to stay in the position and win big in the end. Good to notice and hopefully never repeat!

[Vish_ram]

Everyone talks about cloning. Has anyone thought about "anti-cloning"?. Anti-cloning is, if X owns Y then run away from Y.

 

It can be an effective strategy.

 

[PatientCheetah]

Everyone talks about cloning. Has anyone thought about "anti-cloning"?. Anti-cloning is, if X owns Y then run away from Y.

 

It can be an effective strategy.

 

yes, anything Leon Cooperman pumps, especially if it involves technology or commodities, are likely to be good shorts; maybe there is inverse correlation between how much a stock gets pumped on CNBC and its subsequent performance ;)

[walt373]

One thing worth mentioning is the reflexive nature of speculative borrowing. What actually did them in wasn't commodity prices or not being able to get the plant up, those were only second-order causes. The actual cause was the collapse in their debt prices, making it impossible to refinance. If their debt still traded at a high level today, we wouldn't be having this discussion (and terrible fundamentals do not guarantee a collapse in debt prices). Even if they got the plant running, they wouldn't have been able to repay the principal of the bonds with cash generation. The assumption was that a functioning plant would comfort the market so the bonds would be trading high enough to roll over. Those familiar with Minsky will recognize that this was speculative borrowing.

 

The "hedge borrower" can make debt payments (covering interest and principal) from current cash flows from investments. For the "speculative borrower", the cash flow from investments can service the debt, i.e., cover the interest due, but the borrower must regularly roll over, or re-borrow, the principal. The "Ponzi borrower" (named for Charles Ponzi, see also Ponzi scheme) borrows based on the belief that the appreciation of the value of the asset will be sufficient to refinance the debt but could not make sufficient payments on interest or principal with the cash flow from investments; only the appreciating asset value can keep the Ponzi borrower afloat.

 

https://en.wikipedia.org/wiki/Hyman_Minsky#Minsky.27s_financial_instability_hypothesis

 

So if your investment is dependent on refinancing of debt, you better have a view on the health of the high yield market. And if your investing philosophy advocates viewing an investment's market prices as something wholly independent from its fundamental value, better to stay away from these situations altogether.

[RadMan24]

Buffett said on TV, I believe, or somewhere, he sold Exxon because his outlook of oil, the main driver of profits for oil companies, was significantly lower than the consensus. In other wards, he, like Pabrai realized, just one was way earlier in the cycle than the other, that prices were going to collapse. The difference in this case was that Buffett made a profit, while Pabrai lost 90%. But the price decline of Zinc coupled with the plant issues and mismanagement of cash, and other factors, led to the demise of shareholder value. The company is still around and will likely succeed one day.

 

 

[Txvestor]

Buffett said on TV, I believe, or somewhere, he sold Exxon because his outlook of oil, the main driver of profits for oil companies, was significantly lower than the consensus. In other wards, he, like Pabrai realized, just one was way earlier in the cycle than the other, that prices were going to collapse. The difference in this case was that Buffett made a profit, while Pabrai lost 90%. But the price decline of Zinc coupled with the plant issues and mismanagement of cash, and other factors, led to the demise of shareholder value. The company is still around and will likely succeed one day.

 

When you give such weightage to the collapse of the commodity(zinc), do you realistically think that this management, and this plant were destined to succeed were it not for this price disruption?

I think thats highly questionable at best. If that were all there was to it, more prudent forward commodity hedging would have sufficed.

I think the management incompetence and poor plant planning, design, build, and subsequent repairs were the predominant issues, and cash mismanagement exacerbated the issue. This is a mangement that issued debt, then issued equity, then issued excuse after excuse, and didn't get a damn thing right along the way. Zinc prices collapse might have at most preponed the eventuality by 6mths, but on their track record whats to say they could get the plant up and running in 6mths or ever?

[Guest Schwab711]

 

Buffett does invest in commodity related companies - for example he's currently ramping up his investment in Phillips 66:

>“We’re not buying it as a refiner and we’re certainly not buying it as an integrated oil company,” Buffett told CNBC last September. “We’re buying it because we like the company and we like the management very much.” (Source: “Warren Buffett talks Phillips 66 stake,” CNBC, February 1, 2016.)

 

 

There's a huge difference between oil and nearly every other commodity when it comes to storage. Oil seems like another animal compared to metallic commodities.

[AzCactus]

I just wonder how this May effect the way mohnish handles the posco investment

[str8shot]

Here's my experience with cloning Mohnish positions (started in Oct 2014):

>ZINC - lost 95% and sold out Jan 2016 (exacerbated when I doubled the original position by averaging down, cost basis was $10)

>PKX - lost 20% and sold out in early 2015 (cost basis was $70, sold at $56, stock now around $38 so nearly 50% below original purchase price)

>FCAU - i didn't learn of it until it was disclosed in the 13F in early 2015 and it was $14 then, so I never bought it; it would be a losing position if I had bought it then

>GOOG - i blew this one, nearly bought it around $530 in May 2015 but didn't, it's around $700 now so I missed a 30% plus gain

>GM Series B warrants - still own this one, cost basis about $14.25, currently at $11.73, so down 18% thus far. GM getting no love.

 

So bottom line, in the group above, for me the only winner would have been GOOG. And ironically, the one position that really qualified as a good/great business at a fair price was GOOG, and I passed on it because I decided to allocate additional capital to ZINC, viewing it as having an asymmetrical upside with relatively low downside risk (which was obviously a miscalculation).

 

Where's a time machine when you need one?

 

Once I dispense with the GM series B warrants at some point, my cloning of Pabrai positions will be done.

[merkhet]

Here's my experience with cloning Mohnish positions (started in Oct 2014):

>ZINC - lost 95% and sold out Jan 2016 (exacerbated when I doubled the original position by averaging down, cost basis was $10)

>PKX - lost 20% and sold out in early 2015 (cost basis was $70, sold at $56, stock now around $38 so nearly 50% below original purchase price)

>FCAU - i didn't learn of it until it was disclosed in the 13F in early 2015 and it was $14 then, so I never bought it; it would be a losing position if I had bought it then

>GOOG - i blew this one, nearly bought it around $530 in May 2015 but didn't, it's around $700 now so I missed a 30% plus gain

>GM Series B warrants - still own this one, cost basis about $14.25, currently at $11.73, so down 18% thus far. GM getting no love.

 

So bottom line, in the group above, for me the only winner would have been GOOG. And ironically, the one position that really qualified as a good/great business at a fair price was GOOG, and I passed on it because I decided to allocate additional capital to ZINC, viewing it as having an asymmetrical upside with relatively low downside risk (which was obviously a miscalculation).

 

Where's a time machine when you need one?

 

Once I dispense with the GM series B warrants at some point, my cloning of Pabrai positions will be done.

 

I don't want to derail this thread, but I don't think 15 months is a long enough time to make a determination on whether the market prices reflect intrinsic value. ($ZINC aside)

[str8shot]

Here's my experience with cloning Mohnish positions (started in Oct 2014):

>ZINC - lost 95% and sold out Jan 2016 (exacerbated when I doubled the original position by averaging down, cost basis was $10)

>PKX - lost 20% and sold out in early 2015 (cost basis was $70, sold at $56, stock now around $38 so nearly 50% below original purchase price)

>FCAU - i didn't learn of it until it was disclosed in the 13F in early 2015 and it was $14 then, so I never bought it; it would be a losing position if I had bought it then

>GOOG - i blew this one, nearly bought it around $530 in May 2015 but didn't, it's around $700 now so I missed a 30% plus gain

>GM Series B warrants - still own this one, cost basis about $14.25, currently at $11.73, so down 18% thus far. GM getting no love.

 

So bottom line, in the group above, for me the only winner would have been GOOG. And ironically, the one position that really qualified as a good/great business at a fair price was GOOG, and I passed on it because I decided to allocate additional capital to ZINC, viewing it as having an asymmetrical upside with relatively low downside risk (which was obviously a miscalculation).

 

Where's a time machine when you need one?

 

Once I dispense with the GM series B warrants at some point, my cloning of Pabrai positions will be done.

 

I don't want to derail this thread, but I don't think 15 months is a long enough time to make a determination on whether the market prices reflect intrinsic value. ($ZINC aside)

 

Just sharing my experience. In my view GM is undervalued at current prices, and GOOG as well.

 

Even at today's prices I wouldn't be interested in FCAU. As for PKX, Munger sold out last year (in the $70s I believe) calling it a commodity business that no longer had a sustainable advantage, and Buffett sold out of PKX quite some time ago.

[Uccmal]

Can we sum up the mistakes listed by those losing 95% with the following?

 

1. Not doing your own homework and

2. not changing your opinion despite the value building facts changing

 

I'd add a third mistake (I was also guilty of until one or two years ago): Investing into commodity companies without a clear macro view. But I think most people here would disagree with this one.

 

Number 1 is impossible.  How do you do your "homework" on a commodity investment?  To do this you need to first estimate the revenue for the next ten years.  For commodity companies this is easy and involves two factors, production level and price.  You can do your homework on production but price is impossible.  Thus when you multiply production (which is where most people were also wrong) times the price (which is totally unknown), the result, if you are honest, is I have no idea.  Homework is thus impossible for most commodity companies. 

 

This is why Buffett does not invest in commodity companies.  When he talks about "circle of competence", that does not mean he doesn't understand how a commodity is produced (ie how to get oil out of the ground)... it is that he understands the assumptions in his thinking and stops the analysis when he comes to a point where he doesn't know.  Munger calls this being "rational".

 

***The only way around the unknown wildcard of price is to speculate or buy the lowest cost producer.  The lowest cost producer will be the last man standing.

 

Buffett does invest in commodity related companies - for example he's currently ramping up his investment in Phillips 66:

>“We’re not buying it as a refiner and we’re certainly not buying it as an integrated oil company,” Buffett told CNBC last September. “We’re buying it because we like the company and we like the management very much.” (Source: “Warren Buffett talks Phillips 66 stake,” CNBC, February 1, 2016.)

 

Buffett has said "we like to invest in a business an idiot could run because one day one might."

 

Regarding circle of competence, and speaking as someone who worked in senior management at IBM Global Services for nearly 10 years, I couldn't understand for the life of me why Buffett invested in IBM years back when the stock was $190-200. The company was clearly burdened by the need to transition from being a hardware business to being a services, software and cloud based business. It has been like an aircraft carrier trying to turn itself around. It may get there eventually but it's going to be a long road and the stock is at $120 today.

 

Inexplicably Buffett never invested in Microsoft in the 90's despite being great friends with Gates - when Microsoft had a 85% plus market share in essential PC software and was printing money quarter after quarter - because he said it was beyond his circle. How did IBM end up within his circle years later? And he clearly has misread IBM.

 

This brings to mind the famous Emerson quote "A foolish consistency is the hobgoblin of little minds, adored by little statesmen and philosophers and divines. With consistency a great soul has simply nothing to do. He may as well concern himself with his shadow on the wall."

 

Suncor. 

[valueinvesting101]

http://www.bizjournals.com/pittsburgh/news/2016/02/12/heres-what-it-will-take-for-horsehead-to-get-its.html

[GSpier]

Dear members of Corner of Fairfax and Berkshire.

 

If you are a shareholder of Horsehead Holdings (Zinc), please read this carefully.

 

As you probably know, Horsehead filed a bankruptcy petition at the beginning of February.  The way things appear to be going, equity will be wiped out unless we take action.

 

I plan to ask the authorities to appoint a shareholders committee and I need your support.

 

Without going into too much detail right now, here are some salient points.

 

• As of the last audited balance sheet, Horsehead showed assets in excess of $1 billion, equity in excess of $400 million and more than $30 million of cash

 

• The event that threw Horsehead into bankruptcy was not that it had run out of cash, but a technical default on a small line of credit from Macquarie Bank. Macquarie froze Horsehead’s bank accounts which triggered the bankruptcy.

 

• The zinc price has recovered substantially and the prospects of a further recovery are high.

 

In other words, we believe that there is enormous value in the equity of Horsehead Holdings – but it won’t survive the bankruptcy unless we do something.

The best way to protect shareholder value is to have a seat at the table in the bankruptcy case.  And the way to do that is to ask for a shareholder committee to be appointed.

 

However

 

There is no rule that a shareholder committee must be appointed – and in most cases, they are not.

 

So we have to petition for a shareholder committee – and make the most compelling case we can.  I am in the midst of preparing this petition. If we succeed, the shareholder committee will have legal counsel appointed by the court, with the expenses paid by Horsehead.  It will not cost the shareholders anything.

 

But I need your help:

 

In making their decision about the shareholder committee, the court and the other parties involved need to see that there is substantial shareholder support.

So your support of this petition will be a key factor in getting the shareholder committee appointed – which in turn will materially affect the value shareholders are likely to recover.

 

If you are a shareholder and would like to lend your support, this is what you need to do:

 

Write an email to me at: zinc@aquamarinefund.com stating:

 

1. Your name

2. How many shares you own

3. The approximate date that they were acquired

4. Your support for the creation of a shareholders committee to protect the interests of the shareholders

 

This is our best chance of protecting our equity interest and benefitting from the enormous upside that exists on the other side of this bankruptcy filing.

 

But time is of the essence.  The case is running at lightning speed and we must move very quickly – or we will lose this crucial opportunity. 

 

Thank You.

 

 

Guy Spier

Horsehead_Formation_of_an_Equity_Committee.pdf

[Guest notorious546]

http://www.bizjournals.com/pittsburgh/news/2016/02/12/heres-what-it-will-take-for-horsehead-to-get-its.html

 

Hensler thinks they need 80 million. how do they plan on getting that much money and from where...?

[Guest roark33]

Guy:

I am not sure if this actually Guy Spier or potentially a fake post trying to manipulate the price of ZINCQ (it was up over 300% today). 

 

However, if it is Guy, I do have a few questions. 

 

Would you disclose the numbers of shares you own, as you requested in the post.  Additionally, given the price before your post (under 10 cents), it would seem like a no-brainer for you to add to this position if you do see value in the equity.  Have you added since the bankruptcy filing?  I don't see any 13-D filings from your fund. 

 

I think there were three risks going into ZINC, commodity risk, leverage and execution, all three have turned out negatively.  I disagree that there is value in the equity, but I would be curious (and I think it would be educational) for you to detail your valuation of the business that somehow gives value to the equity when the CEO who has been extremely optimistic about the prospects of the plant still thinks it needs another 80m to complete the plant. 

 

 

Thanks. 

[str8shot]

Guy:

I am not sure if this actually Guy Spier or potentially a fake post trying to manipulate the price of ZINCQ (it was up over 300% today). 

 

However, if it is Guy, I do have a few questions. 

 

Would you disclose the numbers of shares you own, as you requested in the post.  Additionally, given the price before your post (under 10 cents), it would seem like a no-brainer for you to add to this position if you do see value in the equity.  Have you added since the bankruptcy filing?  I don't see any 13-D filings from your fund. 

 

I think there were three risks going into ZINC, commodity risk, leverage and execution, all three have turned out negatively.  I disagree that there is value in the equity, but I would be curious (and I think it would be educational) for you to detail your valuation of the business that somehow gives value to the equity when the CEO who has been extremely optimistic about the prospects of the plant still thinks it needs another 80m to complete the plant. 

 

 

Thanks.

 

Aquamarine Fund held 1.32 million shares of ZINC as of 12-31-2015 according to the link below and the whale wisdom site. Guy can speak to his current holding.

 

https://www.holdingschannel.com/13f/aquamarine-capital-management-llc-top-holdings/

[Parsad]

Guy:

I am not sure if this actually Guy Spier or potentially a fake post trying to manipulate the price of ZINCQ (it was up over 300% today). 

 

However, if it is Guy, I do have a few questions. 

 

Would you disclose the numbers of shares you own, as you requested in the post.  Additionally, given the price before your post (under 10 cents), it would seem like a no-brainer for you to add to this position if you do see value in the equity.  Have you added since the bankruptcy filing?  I don't see any 13-D filings from your fund. 

 

I think there were three risks going into ZINC, commodity risk, leverage and execution, all three have turned out negatively.  I disagree that there is value in the equity, but I would be curious (and I think it would be educational) for you to detail your valuation of the business that somehow gives value to the equity when the CEO who has been extremely optimistic about the prospects of the plant still thinks it needs another 80m to complete the plant. 

 

 

Thanks.

 

I can confirm that it is the real Guy Spiers and he's trying to secure a seat at the bankruptcy hearing table for all the equity holders.  There is no guarantee of success.  He may or may not choose to answer your questions.  Cheers!

[spartansaver]

Guy:

I am not sure if this actually Guy Spier or potentially a fake post trying to manipulate the price of ZINCQ (it was up over 300% today). 

 

However, if it is Guy, I do have a few questions. 

 

Would you disclose the numbers of shares you own, as you requested in the post.  Additionally, given the price before your post (under 10 cents), it would seem like a no-brainer for you to add to this position if you do see value in the equity.  Have you added since the bankruptcy filing?  I don't see any 13-D filings from your fund. 

 

I think there were three risks going into ZINC, commodity risk, leverage and execution, all three have turned out negatively.  I disagree that there is value in the equity, but I would be curious (and I think it would be educational) for you to detail your valuation of the business that somehow gives value to the equity when the CEO who has been extremely optimistic about the prospects of the plant still thinks it needs another 80m to complete the plant. 

 

 

Thanks.

 

I can confirm that it is the real Guy Spiers and he's trying to secure a seat at the bankruptcy hearing table for all the equity holders.  There is no guarantee of success.  He may or may not choose to answer your questions.  Cheers!

 

I knew it was him when he used the word salient. :) Good luck going forward. I enjoyed your book Mr. Spier.

[Tompety03]

Does anyone have an estimate of what the unsecured holders will receive based on how the bankruptcy is progressing?  Is it possible for a retail investor to invest in the secured notes (believe it was a private placement)?

 

I am trying to determine if it is worth buying a small position in the debt to participate in the post bankruptcy value.  I have very limited restructuring experience, so any thoughts from the group would be appreciated.

 

Thanks.

 

 

[jawn619]

Does anyone have an estimate of what the unsecured holders will receive based on how the bankruptcy is progressing?  Is it possible for a retail investor to invest in the secured notes (believe it was a private placement)?

 

I am trying to determine if it is worth buying a small position in the debt to participate in the post bankruptcy value.  I have very limited restructuring experience, so any thoughts from the group would be appreciated.

 

Thanks.

 

 

 

$0.00