RE:RE:RE:RE:RE:RE:RE:RE:Shorts There is a giant difference between me and the shorts. I am LONG foremost but higher up in the capital structure because I don't have your confidence or vision. I also want the equity to go higher which seems the opposite of a short.
No one is more excited than me for FIRE to not need its second mortgage when they pay them off next October (or maybe sooner!). Right now the FIRE.DB quote is saying the lowest price they could borrow new money at is 125% but I think that's way too high which is why I'm long. The equity is saying they will have no problems paying off debt at much lower rates. I agree with the equity market and you but with less confidence so I buy the FIRE.DB and not FIRE.
Super sophisticated investors like yourself should just stick to the equity. For those who are less sophisticated and perhaps less courageous can just own FIRE.DB and do pretty well (4x your capital in 18 months if Opt is right)..
FIRE.DB has to go up for you to make money but the inverse is not true but that's something you will never have to worry about because you know the equity will outperform the debentures while I focus on margin of safety and having a contractual obligation to back that up.
Your driving analogy is an interesting one. Yes, you (the equity holder) are in the driver seat but it's an Uber and the FIRE.DB is the passenger in the back seat has to be dropped off before you can collect your fare and get on with your day. That's why I think the FIRE.DB will outperform the equity until maturity.
I hope FIRE way outperforms though because I have all of those free options too.
OptGreen wrote: Agreed Vulc not much daylight between Meth and the shorts, no need for 2nd mortgage as they start to generate profit and paydown/ restucture existing debt...they both have to try to sell their position big now before the numbers come in and SP is northbound. Why take a back seat when one is already in the driver's?
FIRE has done it's restructuring and now it needs the numbers before there is justification for the SP.s move north....ACB is doing a consolidation because it will drown before it can right size and generate the necessary revenues to stay afloat let alone justify current situation. FIRE is going in the opposite direction with no where near the problems most of the rest of the sector is and will be dealing with for some time yet.
Everyone needs to do their DD and buy, sell, hold or not accordingly. All the best, JMHO...Opt
Method wrote: Vulcan wrote:
we could go on but ill agree to disagree. cheers
What did you think of the second mortgage analogy for the FIRE.DB? The first mortgage is the bank line of course. Not many second mortgages have 125% interest rates (YTM) like this one but thats why its a bargain. Especially if you own equity as well.