David Pescod Today POSEIDON CONCEPTS (T-PSN) $5.00 -8,22
With the world economies slowing down over the last
while, our natural resource sector has been battered and
now it feels like an out and out crash. With slowing economies
you don't need those extra buildings, those extra
houses, those extra businesses to be built, or cars or
trucks purchased, or supplies bought.
Hence the demand for copper, iron ore for steel, lead,
zinc, platinum, you name it - demand is going the other
way and the question remains how bad will it get and just
where is the bottom? Is cash not king?
The economy of China seems to be doing okay, but after
that...well Russia is on go slow, Brazil is barely advancing,
India is doing okay but not great, and much of the
world's biggest economy is in recession in Europe.
THE BIG QUESTION REMAINS...what next for the USA,
as they get ever closer to the fiscal cliff. We have little faith
in Obama’s ability to get a deal done and if they don't,
Josef Schachter’s concern of a two or three thousand
point drop in the Dow could be the future. We have already
had a big start in that direction.
Today comes news that one of the success stories, Poseidon
Concepts in the energy patch, has gone over the
cliff. A symbol of the times...
These were the folks that came up with the portable
tanks of the next generation, and are so vital to those that
frack. But the quarterly numbers show us that even their
products are not in such high demand as oil is now much
closer to 80 dollars a barrel than 100.
Revenue for the quarter was down over 33 percent, as
EBITDA came in at 26 million versus 46 million last year,
utilization of their tanks slid from 70 per cent to 50, some
clients are negotiating better deals for the longer term, and
some clients simply couldn't pay the bills. The company
stated that demand for the tanks was down in areas of the
US Bakken and the Rockies.
Today was a monstrous surprise and owie for shareholders,
one of a long list in the resource sector of late...so
how many quarters might it take to see a bottom for the
sector, and is cash not king for a while?