RE:RE:RE:RE:RE:LTD - $4B is realisticHey Pablo.
We've had this negative/reverse split discussion here many times.
The fact to the matter is that when you get a positive split, it's great, because your wealth/investment grows exponentialy. Just like Dollarama and Tesla recently.
As for Precision Drilling. I feel sorry for the holders of the stock. 20 to 1 split. PD's share price, I've sold at $40 before. I think it went as high as $60. How in the heck did they go down to .80 cents I'll never know. But I'll tell you this. If the shorts get a hold of it again, it could go back down to $5.00 again. I don't wish that on your investment, but Bombardier shares are very volatile. Given todays BBD.B's SP in the pennies, I'd rather suffer another 2-3 years at under $2.50 SP than have a 10 to 1 split in Feb. 2021. Because the shorters have this stock by the short and curly's and they could take it back down to $2.50 in a month.
So moral to the story is for me. Doing a reverse split is not going to stop the manipulation here with Bombardier.
It is better for the company to take care of it's Debt to a manageable level, as you are saying, and PRONTO, as we've discussed before, because the interest on the debt is deadly for a stand alone BA.
The best thing that could happen to Bombardier as a company right now is to churn profits (FCF) in the coming Quarters, going forward in 2021 with BA, and have dry powder sitting to control their destiny financially. How? Be prudent with their spending, and trim (the fat) whatever is left of this company. Maybe I'm a dinosaur, but I believe in good fundementals when I run a company. I'm not a risk taker when I know one move will destroy the whole company like PB did. Never spend more than you can afford to. And always expect the unexpected. Both went against PB with the CSeries. He overspent, and never expected the backlash and competition from the Duopoly.
I sometimes wish that I had sold at even $4.70. I never proffessed here though that I was a good stock trader. But I think it'll work out really well for all of us, if this Family finally got it's act together with this good company and it's great products.
As for the debt.They can address the debt, by traditional methods. Methods that every good company does, with traditional financing. Maybe it'll be slower but they bought some time with BT's money. They have a couple of years to do it. But I say they only have 1 year. If I were the family. I'd hire 10 proffessional accountants, and the best financial consultants, that money can buy to help them. If in a year they can't refinance?? Then my suggestion would be. Sell 25% of BA to Bain with a covenant that the Family still controls BA, and the right to buy back the 25%, if Bain wants to sell those shares to the market. Bombardier buys, the 25% back. Problem solved and they go forward. They should be able to get enough from the 25% sale to take care of their remaining company. BA can be profitable if they don't have the albatross debt. The only way to stop the bleeding, is to be able to make more than you spend. But that is temporary too. Look at the need to sell BT. Profit's are the key. Get BA's margins up, and run the company well and the rest will take care of itself.
If they focuss on BA, stay out the hair of EM, and act as proper Owners in the next 2 years. Problem solved. Not treat Bombardier as CHIPS on the Black Jack table. We both know that the house always wins at the table.
Cheers
PabloLafortune wrote: Hi 859, I understand your concern about the reverse split. My recent experience with Precision Drilling (PD) where they did a 20:1 reverse split, has been good. Prior to that, they had trouble getting volume. It was 80-85 cents presplit now $28. ////
Regarding the debt, strictly as an observer, 3 things. first, I'm guessing if its $4B after Q4, that's too high. It should be addressed. 2nd, as you know, good businesspeople don't miss opportunities when they present themselves and right now we are probably trading at 1/4 of the company's intrinsic Enterprise value so....3rd, EM said the debt will be higher than expected by $2B due to the pandemic? Well you know what thats possible I guess but probably I don't believe it. Thou doth protest too much me thinks. ////
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Anyhow, that's what I'm expecting. The debt to be addressed once and for all, certain parties to carpe diem and we all to be better off than we are now but not as well off as we could have been had .....................................................................................................
Cheers,
Pablo