Bellatrix Exploration Ltd (Canada) BXEFF

RE:Its Gonna Pop Hard! 10 X Gain!

[Ranger56]

Richy, there is a very good reason why BXE has declined continuosly for so long and so low. Clearly something is very wrong and Schachter was never able to point it out. When for all other major investors its very clear and born out in price action.
Here is whats wrong...quoted from BXE November/2018 presentation off their website:
"Bellatrix has no long term debt maturities until 2020 US$154MM Senior unsecured notes due May 15, 2020 C$50MM convertible debenture due Sept 30, 2021 US$87MM Second Lien notes due 2023".
So that is 154M coming due in one year & 4 months, May/15/2020.
Their market cap as of today is 56M. This one note coming due is worth 3 times what the market cap is.
What this is telling you is the debt is distressed and there is a big risk they will not be able to either extend this maturity by several years or sell assets to pay this off at maturity. Have you ever watched what happens to a company that is distressed and unable to take care of their debt. What tipically happens is a massive restucture of the debt, dilution of shares, and most of the shares handed over to the bond holders in debt conversion to shares, with close to zero left for shareholders. Debt holders remain whole, while there is massive shareholder destruction for existing shareholders.
There is a chance the management can fix this...but very often, when distressed, they cannot sell assets at fair value and there is no investor/partner willing to take a large stake and inject cash. That is why there are no buyers wanting to takeover BXE.
So now what you have is big risk of losing everything, or, management finds a way to fix this. And what is the track record of the current management on this issue over many years??
It is no surprise they are not buying their own stock, as they know..high risk.
The analyst who got this right is James Hodgins and he has a short position so he said on Nov/27/18. The one guy that pointed out the issue. Hodgins is right, Schachter is wrong.
All you got now is hope..that the management team can some how pull this off. Its hard to bet on hope.