Guest roark33 Posted August 26, 2016 Share Posted August 26, 2016 Agree with oddball, the numbers tossed around regarding the book value of the assets make the investors look foolish. The plant in NC is not worth anywhere near what they put into it, if it is worth anything. If Spier and Boswell have some mysterious bidders who are willing to pay more than the debt for the other two assets and junk the NC plant, then they should show up and put their money on the table. I don't think they exist. Link to comment Share on other sites More sharing options...
awindenberger Posted August 27, 2016 Share Posted August 27, 2016 I just recently read a bit about this story, but I for one am in the investor camp. How can a facility that cost $550M to build be absolutely worthless, particularly today with zinc prices back up over $1. The fact that it could be brought back online and generate profits, even if it requires an additional $100M+ to bring online, means the value must be more than $0. Link to comment Share on other sites More sharing options...
Guest roark33 Posted August 29, 2016 Share Posted August 29, 2016 Spier cancelled his deposition today. The sad thing about the ZINC story and one of the reasons I follow it still is that there is almost no learning going on here. Spier has put forth this idea that the big bad creditor is stealing from the equity holder, when in fact he merely made a bad investment. If it turns out that the bidders "don't show up", Spier will somehow argue that the creditors wouldn't return their calls or some other nonsense. Link to comment Share on other sites More sharing options...
scorpioncapital Posted August 29, 2016 Share Posted August 29, 2016 It's a bit of a philosophical question. It's like that Martin Shkreli incident where the guy loses all this money but then makes it back and more so the investors don't know what to think. In other words, if there is a deadline and you miss it, can you claim afterward if you are lucky enough for things to turn around, that the game really wasn't over when you crossed that line and you should have rights afterward because of this fluke good news? If zinc prices went the other way, this discussion wouldn't exist and everyone might be in agreement. Taking it one step further, no company ever goes bankrupt if they could have just a bit more time and another loan. Link to comment Share on other sites More sharing options...
Picasso Posted August 29, 2016 Share Posted August 29, 2016 The whole "bondholders stole our company" has been frustrating to listen to. None of this happened in a vacuum. The company was incredibly mismanaged going into the filing, then add in a bear market in zinc pricing. The lenders have certain rights for a reason and management at ZINC should have been much more thoughtful about that. I think the stock was at $1.30 before they filed? The 1st liens were down at 50 cents? Now if the stock was at $15 and then some technicality happened and the lenders came in and took away the business that's another story. But I don't understand what they're stealing here. I don't get the sense that the majority of bondholders *want* to run a crappy zinc plant. It became that way by necessity. Link to comment Share on other sites More sharing options...
tylerdurden Posted August 29, 2016 Share Posted August 29, 2016 It has been a while since my last post here at ZINC pages. I really don't understand what Spier is arguing about. The problem with valuing this plant is that it is not working and no one can give you any assurance that after spending an X $M amount that it will work full capacity. Perhaps it shouldn't be valued at $0 but under a bankruptcy case the bondholders would and probably should have the upper hand in terms valuing this thing. I personally admitted that I made a mistake, especially regarding the quality of the management and moved on. Guy Spier should also understand that this is not a traditional manufacturing asset that can be valued based on current zinc prices... There is still significant risk that bondholders will have to take when they take over... Link to comment Share on other sites More sharing options...
bskptkl Posted August 31, 2016 Share Posted August 31, 2016 Day 2 of hearing going on today. Updates here https://twitter.com/search?q=%24zincq&src=ctag Link to comment Share on other sites More sharing options...
Liberty Posted August 31, 2016 Share Posted August 31, 2016 One take: http://y0ungmoney.blogspot.com/2016/08/horsehead-holding-stock-is-worthless.html Link to comment Share on other sites More sharing options...
bskptkl Posted September 1, 2016 Share Posted September 1, 2016 One take: http://y0ungmoney.blogspot.com/2016/08/horsehead-holding-stock-is-worthless.html " Very rarely does a company emerge from bankruptcy with its pre-petition stockholders maintaining a meaningful stake in the business. I know of only three instances of that happening:" I can think of dozens where equity made a meaningful recovery - maybe not the same as meaningful stake in reorganized business, but not sure if distinction matters. Just looking at my current positions - I still own SIGA, PRXIQ, SEMIQ. Just bought BINDQ today...etc Link to comment Share on other sites More sharing options...
Max Alpha Posted September 1, 2016 Share Posted September 1, 2016 A lack of industry specific knowledge caught out many investors although you didn't need industry knowledge to see the red flags. For many I think the concept of spending $500m and it being worth no more than scrap doesn't compute. When processing plants go wrong they can become a bottomless sink of money. Because the plant will likely never get to nameplate capacity someone could construct an alternative smaller plant that produces the same output, except with much lower operating costs (because it would not have huge unutilised redundancy and abnormally high wear rates) at a fraction of the capital cost, and with greater certainty. Anyone who is considering buying the plant and investing in achieving nameplate capacity needs to subtract from the purchase cost: Interest cost of carrying the plant for 1-2 years until problems are resolved and it can potentially generate a return Abnormally high running costs due to abnormally high wear rate of consumable components due to design flaws Costly specialised engineering expertise to troubleshoot the plant Labour for installing upgrades and performing repairs Parts and materials for upgrades and repairs Contingency for the likely scenario that some of the upgrades and repairs do not resolve the problems as expected / unknown knock-on effects Risk factor for the possibility that it will never reach nameplate capacity Link to comment Share on other sites More sharing options...
SnarkyPuppy Posted September 2, 2016 Share Posted September 2, 2016 Judge expected to rule at 11am EST this morning, for those following. Link to comment Share on other sites More sharing options...
bskptkl Posted September 2, 2016 Share Posted September 2, 2016 ruled against Link to comment Share on other sites More sharing options...
Ballinvarosig Investors Posted September 2, 2016 Share Posted September 2, 2016 Taylor Harrison @TaylorHarrison5 34m34 minutes ago #HorseheadHolding judge on confirmation ruling: “This is one of the most difficult decisions I’ve had to make in 10 years on the bench." Link to comment Share on other sites More sharing options...
str8shot Posted September 2, 2016 Share Posted September 2, 2016 One take: http://y0ungmoney.blogspot.com/2016/08/horsehead-holding-stock-is-worthless.html Youngmoney was right on this stock long before this recent take. Here is an article dated Jan 2015 that I only stumbled on late in 2015, after I'd already followed Pabrai into no man's land when he doubled down in Aug 2015. http://y0ungmoney.blogspot.com/2015/01/not-fan-of-horsehead-holdings.html His last paragraph was ominous and unfortunately in my case, dead on: Many value investors are interested in ZINC because Mohnish Pabrai is the company's largest shareholder. Pabrai has good long-term returns, but he's also had his share of losing investments, so I hope that investors aren't outsourcing their due diligence to him. Lesson: Never ever outsource due diligence - review available information and use your own guidance system. Otherwise buy index funds. Link to comment Share on other sites More sharing options...
str8shot Posted September 2, 2016 Share Posted September 2, 2016 Taylor Harrison @TaylorHarrison5 34m34 minutes ago #HorseheadHolding judge on confirmation ruling: “This is one of the most difficult decisions I’ve had to make in 10 years on the bench." As much as I applaud Guy Spier's efforts to get an equity committee established, there is no getting around the fact that sticking with Horsehead in 2015 as the operational blunders snowballed and management credibility crumbled was nothing less than a ridiculously huge error of commission. One that I unfortunately made as well. Hopefully there will be a settlement for equity holders a couple of years from now to recoup a buck or two per share as a result of management's gross negligence and misleading statements. Link to comment Share on other sites More sharing options...
DeepSouth Posted September 2, 2016 Share Posted September 2, 2016 Taylor Harrison @TaylorHarrison5 34m34 minutes ago #HorseheadHolding judge on confirmation ruling: “This is one of the most difficult decisions I’ve had to make in 10 years on the bench." As much as I applaud Guy Spier's efforts to get an equity committee established, there is no getting around the fact that sticking with Horsehead in 2015 as the operational blunders snowballed and management credibility crumbled was nothing less than a ridiculously huge error of commission. One that I unfortunately made as well. Hopefully there will be a settlement for equity holders a couple of years from now to recoup a buck or two per share as a result of management's gross negligence and misleading statements. Shitty companies run by less than honest management go bankrupt all the time. I can't remember equity holders every getting a meaningful judgement years down the line. It's an analyst's job to understand the business and evaluate management (and their character). Be rational. Link to comment Share on other sites More sharing options...
Ballinvarosig Investors Posted September 2, 2016 Share Posted September 2, 2016 Lesson: Never ever outsource due diligence - review available information and use your own guidance system. Otherwise buy index funds. Would someone go over to the Sears thread and tell some of the folks that? Link to comment Share on other sites More sharing options...
rmshaner Posted September 6, 2016 Share Posted September 6, 2016 Taylor Harrison @TaylorHarrison5 34m34 minutes ago #HorseheadHolding judge on confirmation ruling: “This is one of the most difficult decisions I’ve had to make in 10 years on the bench." As much as I applaud Guy Spier's efforts to get an equity committee established, there is no getting around the fact that sticking with Horsehead in 2015 as the operational blunders snowballed and management credibility crumbled was nothing less than a ridiculously huge error of commission. Given the huge recovery in the peer group as well as the underlying commodity this year it is very easy to imagine a situation where late 2015/ early 2016 was the bleakest point for Horsehead. Had management navigated around bankruptcy and not colluded into it, and Pabrai and Spier sold we'd be chastising them for bailing at the bottom. It wasn't as easy to draw the conclusion to abandon ship in late 2015 as it is today, and although today that looks like the perfect decision it could have also been wrong. Link to comment Share on other sites More sharing options...
randomep Posted September 6, 2016 Share Posted September 6, 2016 Taylor Harrison @TaylorHarrison5 34m34 minutes ago #HorseheadHolding judge on confirmation ruling: “This is one of the most difficult decisions I’ve had to make in 10 years on the bench." As much as I applaud Guy Spier's efforts to get an equity committee established, there is no getting around the fact that sticking with Horsehead in 2015 as the operational blunders snowballed and management credibility crumbled was nothing less than a ridiculously huge error of commission. Given the huge recovery in the peer group as well as the underlying commodity this year it is very easy to imagine a situation where late 2015/ early 2016 was the bleakest point for Horsehead. Had management navigated around bankruptcy and not colluded into it, and Pabrai and Spier sold we'd be chastising them for bailing at the bottom. It wasn't as easy to draw the conclusion to abandon ship in late 2015 as it is today, and although today that looks like the perfect decision it could have also been wrong. I can accept this argument however Pabrai added to his position as operational mishaps mounted and the stock dropped. I don't know about Guy. That seems to be a classic example of throwing good money after bad. Shouldn't that be a huge error? Link to comment Share on other sites More sharing options...
dbuch Posted September 9, 2016 Share Posted September 9, 2016 Here is a copy of the transcript from the decision http://www.ashby-geddes.com/assets/attachments/157.PDF Link to comment Share on other sites More sharing options...
gg Posted September 9, 2016 Share Posted September 9, 2016 Does anyone have any idea why there continues to be so much volume trading in ZINCQ? Is there any (even .0001%) chance of equity holders seeing upside? Even some recovery via a lawsuit against the management I would assume is only available to people who held into the loss, and not the people buying at 1 or 2 pennies a share today Link to comment Share on other sites More sharing options...
TwoCitiesCapital Posted September 9, 2016 Share Posted September 9, 2016 Does anyone have any idea why there continues to be so much volume trading in ZINCQ? Is there any (even .0001%) chance of equity holders seeing upside? Even some recovery via a lawsuit against the management I would assume is only available to people who held into the loss, and not the people buying at 1 or 2 pennies a share today Pretty sure those rights are transferred with the shares.... Which is why we have an entire FNMA thread on the outcome of a lawsuit for actions that took place years ago. Link to comment Share on other sites More sharing options...
Jurgis Posted September 9, 2016 Share Posted September 9, 2016 Does anyone have any idea why there continues to be so much volume trading in ZINCQ? Is there any (even .0001%) chance of equity holders seeing upside? Even some recovery via a lawsuit against the management I would assume is only available to people who held into the loss, and not the people buying at 1 or 2 pennies a share today Pretty sure those rights are transferred with the shares.... Which is why we have an entire FNMA thread on the outcome of a lawsuit for actions that took place years ago. I am not a lawyer, but fraud and similar securities class action lawsuits have strict time periods of share ownership to be eligible to settlement. They are very different from recovery from BK where the current owner is eligible for any gains and FNMA lawsuits where presumably also current owners benefit. Edit: there might be some confusion since in ZINCQ case there might be some recovery for current holders from BK proceedings and/or there might be some recovery for past holders over some past time period from fraud/mismanagement lawsuit. I am not a lawyer and I don't follow ZINCQ much, do your own DD before investing and afterwards. Link to comment Share on other sites More sharing options...
maverick Posted November 23, 2016 Share Posted November 23, 2016 Hi, for those of us who rode this name to BK, will we be able to claim it as a tax loss for this year? Do we need to do anything to claim the tax loss? The name still shows up on my Fidelity account but with current value of NA and one can't really sell the name now. Link to comment Share on other sites More sharing options...
RadMan24 Posted November 23, 2016 Share Posted November 23, 2016 http://www.kiplinger.com/article/investing/T052-C001-S001-how-to-sell-worthless-stock.html Link to comment Share on other sites More sharing options...
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