Silkroad Equity bid reckless I donot know much about Silkroad equity. Just went through their website in about five minutes. There is very limited information available to form an opinion about them & if they are capable of taking over oil assets & running them profitably.
There are a few things that raise RED flags for me.
They are private investment company which has been investing in various projects including energy for the last 20 years
The problem is that they are not an energy company.
They have put in a bid of over a billion dollars which is almost double that of the second highest bidder. This makes me belive that are total reckless & have not clue what they are doing. Seem to be a bid put in by amateurs.
The other scary part is that over 20 years that have done total deals of 5 billion dollars. Which could mean that they were doing small deals this one bid is 20 % of all the deals they have made in 20 years. This bid is for the assets then they would also need a pile of money for production.
History is full of major companies like Microsoft, amazon, goggle Cisco, Dell, Yellow media the list is very long who have paid billions of dollars for assets & then have written them off. There a tendency among the buyers to over bid. Any time a company buys assets it makes me very nervous because in very large number of cases they buy over pays unless there is a distressed assets.
Not too long agoARMZ owner of UUU bought the assets of Mantra. In my book they overpaid after the Japanese incident. Do you remember Oilexeco which went crazy buying assets & went bankrupt
I am very please that BNK did not go crazy & put in the high bid. I could be blessing that BNK will not get the assets. They have big enough assets & issues to deal with.