Sika, I too get James Cornell's MA. After such a vigorous recommendation to buy QIN after those 'dumb' shorters had pushed the SP down to the $1-$1.20 region I thought that his latest issue was weak and clutching at straws. There was no mea culpa, but instead an attempt to find some upside (pay less for Santalis) from what was obviously a very poor announcement regarding the loss of the Galderma contract.
Everybody gets things wrong from time to time and James certainly didn't help his subscribers in this situation. I would have much preferred to see a "hey guys, I may have got this one wrong, sorry. Let's see what happens" ... but that's not James' style.
There's been a lot of talk about these offers, etc from third parties and hopefully, for current shareholders these are positive although I would guard yourselves against disappointment.
Possibly an analogue to look at is PDN and see how the vultures are circling to the detriment of shareholders. The two companies are similar in that there are assets to squabble over, a large debt position and questions over the viability of the operations.
I agree with people's' view that the plantations are a valuable asset. However, this whole mess started when questions were raised about what that value actually is. None of us know this because all of the variables are opaque:
(1) Mortality rate
(2) Heartwood volume
(3) Oil content
(4) Price per kg/l once volume comes to market
On the upside, there are significant potential strategies that QIN can take to help it through a possible cashflow crisis that is looming:
(1) Suspend the 2017 planting programme if no investors materialise, although this would create a hole in the plantation life cycle
(2) Sell surplus, unplanted land into the market to raise funds, although at a later date land would need to be repurchased if QIN wanted to complete its plantation - 15 years x 1,500ha per year = 22,500 ha.
(3) Sell Santalis or try to IPO it on the US market
(4) Capital raise from one/ some of these apparently interested parties
(5) Offer an exceptionally attractive deal to the institution holding the Put Option in return for extinguishing this Put Option
(6) Get a fricken wriggle on and sell some EISO/ timber to customers to show stakeholders that there is a market for the end product and at a decent price that justifies the plantation valuations and gets some cash in the door.
They don't need to have this done by the time they (hopefully) come out of suspension, but stakeholders need to see a credible strategy otherwise 29.5c will not hold.
Regardless, it will be interesting to see what QIN come up with. I certainly hope that they are working their arses off for remaining shareholders. I am now in the former shareholder camp and considering whether I sign up for the Class Action.
If only QIN was a bitcoin miner, aye
Cheers
john
QIN Price at posting:
29.5¢ Sentiment: None Disclosure: Not Held
