RE:RE:RE:RE:Cold blast = NG price increasing. BXE should benefitJust1Question wrote: 1condor wrote: Just1Question...I am not sure why you would buy the stock as it continues to fall...down to 57 cents today (another 5 percent).
Agreed it is speculative - the old adage of trying to catch a falling knife.
Risk money for sure - but then again $12,000 isn’t going to make or break me.
Cheers
Painful to see the quoted price so low and continually dropping yes. Although you may question why you would buy the stock as the price continues to fall, one reason is...you shouldn’t let yourself be a servant to the market, the market and it’s price should serve you the investor. The price was irrationally low at 1.00 and above. Stock market prices are not tethered to any valuation one assigns. It could theoretically go to 1 cent. But that doesn’t mean the underlying business will go bankrupt.
Hey, I could be wrong and I’m only investing money I can lose in my cash account and a small bit of TFSA. No RRSP allocation to this, it’s too risky. The way I see it, BXE has tangible assets. A lot of debt yes, but those assets are well characterized and are worth far more to BXE competitors than the stock market reflects now. BXE could merge with a larger player providing a windfall, they could JV some land or gas plant infrastructure for cash, they could sell off some wells or they could restructure their debt pushing out the maturity. Or A combination perhaps.
If you study their investor presentation (really study) you may find that they bring on Spirit River wells very efficiently. They bring on wells cheaper than anyone else. They also have owned infrastructure giving them an edge. So it’s not like they mismanaged their capex spending and debt plans. They bought and developed hard assets with the borrowed money. I can see why they did that. They built out some impressive stuff.
if I miscalculated, and they restructure in a disorderly way, the learning experience will be to take a closer look at the debt, what management did and didn’t do and to re-examine what level of debt to assets caused the problem. The way I’m reading this, you need more debt to bring down a firm like this. They should be able to negotiate some breathing room quite easily. Cash flows are real as are their assets they have to generate them.
Wish me luck everyone!