RE: RE: RE: RE: RE: RE: RE: From WPX board Sdomae, you appear to have an agenda here, and I am no longer convinced you are long on AAA, which by the way I will not hold against you if that is your persuasion.
i welcome the interaction on the subject and it is definitely something that AAA holders should be aware of and discussed, but I really thought I answerd your points.
if aaa was down to its last few dollars like Wpx was in 2012 and the investment in Rodinia represented nearly 50% of the money that they needed to raise in a 2/1 share deal, then I would be the person on this board shouting loudest at this and sending snotty emails to management.
but it wasn't that way, and that is the key point. They made a decision that might have been wrong, but that decision has not affected their cash flow , their ability to raise money or the share price.
Whether they have $25 million or $26 million in the bank will have no meaningful effect on the future, but if they gave 50% away, it would be a different story.
If your quarterback in the Super Bowl throws 5 game winning touchdown passes, but then fumbles one and gives the ball away, yet it doesn't influence the score and you still are on course to win the Super Bowl, what do you do? Replace him at half time and chastise him for his one mistake?
In the same way, if Wpx's management had "LENT" discovery harbour say $100,000 I would never have mentioned it because it is inconsequential. In fact they did lend/invest in another company close to 100k and I didn't bother to mention it because that figure does not affect much.
but their decision was not inconsequential to their cash flow or share price, if there were not analysts reporting that they were almost out of money because the still had say $5 million in the bank, they would have been in a much better position to negotiate the private placement, Perhalps they could have gone to the market with it and needed less warrants or none at all.
For sure they would have not have needed to dilute as much as they did cos they would have had nearly 50% of the required funds.
The decision making abilities of management are directly involved in not only the investment in Rodinia, but also, and crucially, in the amount of shareholders money they were prepared to risk.
They carefully considered their cash position and choose an amount that would not affect the standing of AAA in a meaningful way. I applaud their cautiousness. With hindsight they Perhalps should have avoided it, but it doesn't really matter that much cos they have lots of money in the bank.
I would not buy rodina, and Perhalps management made a mistake with this. But any mistake has to be considered against the backdrop of all their decisions. And I can find no fault with them
My agenda is that I only think companies with a $600 million construction cost are getting built and that IMHO I can't see a mine with a $3.3 billion capex getting built in this environment.
I hold no short positions and have no plans to short. In fact I wish the regulators would ban shorting and HFT.