I am an ex-holder - this has been a salutary lesson in investing for me - and in human psychology watching the end game play out.
@Successwillcome I take no pleasure in watching you as you fall victim to your own delusions - however your incessant cheerleading does at times come across as a suggestion to others that this stock may indeed represent a "high risk, high return" opportunity of the kind championed by Warren Buffett.
Warren Buffett would not touch this stock with a 1.3 billion foot barge pole.
This stock is not "temporarily on sale" due to shorters - unless by "temporarily on sale" you mean "has been in terminal decline for the past two years".
It has been driven over the proverbial cliff by a breath-taking combination of hubris, incompetence and borderline dishonesty by the board, who have continually made "everything's on track" announcements, only to release numbers mere weeks later that show things are clearly NOT "on track".
SGH
has been shorted - by people who followed reports in the financial press, rather than the steaming rivers of horse-crap being released by the board.
At the end of the day - the numbers don't lie. Shorters in SGH don't need to manufacture information to leak to reporters.
And yes - SGH are in "important negotiations" with the banks -
because they owe over $700m and need an urgent injection of cash to avoid trading while insolvent within the next 14-28 days, and they need the banks to agree to let them kick the can further down the road so they have time to turn the business around from the from the current cash-flow negative position, to have any chance of making the interest - let along principal - repayments on their debt.
Unfortunately for shareholders, the banks are now in a position of "fool me once, shame on me... fool me twice..." - well, I don't think that's gonna happen! Why would they trust any numbers put forward by AG, Skippen and co. now?
@Grant62 among others has painstakingly gone through the numbers and yet you still don't seem to get it.
You seem to think that forming an agreement with the banks will in some way be a "rescue" package that will see your shares bounce back to $1 (or in your more delusional moments $8 - because after all, it was trading at $8 only two years ago - as though past share price was a law of gravity or something!)
Let's be clear - even buying at this price - chances are that existing shareholders will either be left with a company in administration, that is then broken up and sold - and their shares will be worth zero - i.e. 100% loss of capital...
OR... banks will do some kind of D4E swap, which to take care of even a reasonable chunk of the outstanding debt would mean diluting existing shareholders by about 95%.
In which case, those 8c shares someone bought today on your "Warren Buffett" advice would be worth 0.076c - yes - that is LESS THAN ONE CENT.
Quite probably a combination of the two. The banks take control through D4E and then split the business up and sell assets to pay down debt.
The company would then do a 1:100 or 1:1000 recapitalisation to get the share price into a tradable price range - so you would end up with 1 share for every 100 or every 1000 shares you currently hold.
Yes - the share price would be back at 8c or even maybe 80c - but you would hold a LOT LESS SHARES. The value of your investment would be destroyed.
Let's work some numbers on how this looks to someone who buys 1,000,000 shares at 8c today. That $80K investment then gets turned into 10,000 shares after the D4E swap and recapitalisation. They are still trading at 8c - but the "investment" is now worth only $800. And with the smaller company that remains after parts are sold off, it will be years, possibly decades, before you ever get back to your original investment value.
I don't know the guy personally, however I am confident in saying this is
not the sort of "opportunity" Warren Buffett had in mind when he made his famous pronouncement about fear and greed.
So please, please stop spruiking this as "high risk, high return". There is no possibility - zero - that there will be any sort of "positive" return for shareholders, even at the current price levels.
I'm not urging you to sell and I don't want your shares. I understand that no-one will get
your shares until they are forcibly taken from you (which I suspect will happen within the next few weeks).
If you can mount a valid financial case for making an investment that doesn't involve unicorns and rainbows and banks charitably "forgiving" large chunks of debt - then by all means, make your case.
And by this - I don't mean "magic" WTG $100M escrow money that MIGHT come in sometime next year (that SGH somehow win in spite of statements made by SGH directors about due diligence they did), or any "over the horizon" class actions with VW / Manus Island / ...
I mean a plausible way for SGH to trade out the next 6 months based on the current financials released by the company.
Really think about the cash they need for payroll, rent, interest payments etc. - and balance this against the current cash-flow negative operation and the dwindling incoming business "headwinds" as reported by the company (due to their parlous position).
If you can see ANY conceivable way out of the monstrous hole they have dug themselves - that does not involve massive dilution - then I am all ears.
Otherwise - if you are genuinely just seeing this as "Roll up, roll up, plonk your cash on RED, the wheel's about to spin and I've got a GOOD feeling about this one..." - please stop trying to convince other people to join you in this mad gamble. It is unconscionable.
