Lonmin Share Discussion Threads

[careful] 10/7/2015 22:21

glen disposed of 24% (140m shares) to its own shareholders.
if 8m shares traded can cause it to fall 12% then this hangover could take a while to work through.
presuming that the shareholders are dumping them.

[karmastuartra] 10/7/2015 19:41

Well Mötley fool now looks,well the fool.after tipping these at£1.23 and citi group upgraded to a buy
In march sending them to a height of£1.50.so the world economy has changed that much in three months?
I think not.no debt,so no convenants to breach,cash in bank and as mentioned £1.5 billion in turnover to come over three years,who knows maybe more? Management will get to grips with overheads and labour costs and expenditure in General.UBS made a bad call today,I will be adding.

[grlz] 10/7/2015 19:13

Problem is China is likely to start trying to drive Pt down below $900 as they try and micro-manage red chip demand to solve current problems.

[careful] 10/7/2015 16:59

final vol 8.3M shares traded.
still not that heavy out of 584m. (1.4%)
12.3% down.

[karmastuartra] 10/7/2015 16:36

Only six million traded,down 12%,does Not add up.

[dealy] 10/7/2015 16:22

The company has to respond to this share price drop. I will chase them (IR) on Monday.

[careful] 10/7/2015 16:22

against that no-one is buying at these levels.
there must be insiders who know.
no director buying, positions being taken.

[karmastuartra] 10/7/2015 16:14

Nothing from the company scandalous

[dealy] 10/7/2015 16:13

absolutely. it is impossible to arrive at a target yet they are so confident that they have done so scientifically. Arrogant, stupid cnnnts!

[careful] 10/7/2015 16:06

this technique of estimating a revenue, which depends upon production rates, overheads and the market price of the commodity, then estimating the ebit margin and from that guessing a valuation of the share is ridiculous.
the error must be +/- 50%.

i think they start with the price they want and then build up from that.
they have their own agenda.

[dealy] 10/7/2015 15:59

The UBS report pencils in revenue for the next 3 years of around 1.5 billion USD and assumes Ebit margins are around 2%. But nobody runs a business on a sustainable basis with such low Ebit margins. If Ebit margins were 4% (still awful) their valuation would be 150p.

The lousy Ebit margin forecasts naturally makes cash generation look poor. Good management and better metal prices can boost Ebit margins substantially.

[careful] 10/7/2015 15:54

10% down with only 1% of the company's shares traded.
no doubt mine and yours on loan at a pittance.
amazing price movements.

[dealy] 10/7/2015 15:24

UBS shows solid revenue forecasts over the next few years but just assumes management can't squeeze out any profit. If profit margins were increased by just 2% they'd tell you the company is worth 3 times the current price.

[lazyhisnibs] 10/7/2015 15:19

There is that but perhaps a few of their clients would have had even more to be frustrated about if UBS had waited till the 17th.

[karmastuartra] 10/7/2015 15:07

What a crazy outlook from UBS ,£1.30-75p,what the heck are clients supposed to make of it?

[lazyhisnibs] 10/7/2015 14:36

What if that is exactly how they see it. Would it not then be irresponsible to fail to tell their corporate clients.

I'll wait till the 16th and sit down with an accountant friend as the hard numbers aren't my forte.

However, it does seem counterintuitive that a company make losses since the last cash call and not be having to consider raising more funds at some point in the not too distant future. The question must be when.

It sounds like Glen tried but couldn't sell it's quarter of the share holding and then off-loaded them to its share holders. The rest is history.

[dealy] 10/7/2015 14:05

To call a "sell" on any stock in an environment of low interest rates, recovering economies, improving GDP etc. is a statistically strange call. But doing it on a stock that has already cratered is just irresponsible.

[dealy] 10/7/2015 13:38

I bought shares of ABB in 2002 when Deutsche Bank put a 1 cent target on the shares. The market cap today is over 50 billion USD.

[karmastuartra] 10/7/2015 13:25

Couldn't agree more dealy,no excuse for this drop.

[dealy] 10/7/2015 13:23

Nothing wrong with Lonmin's balance sheet. They raised more than 800m GBP in equity over the last 3 years. Net debt is zero right now. No reason why management can't take normal measures to improve profitibility. Merger with peers is also possible and value enhancing.

Downside at this level is negligible imo. Totally overdone this sell off.

[lazyhisnibs] 10/7/2015 12:57

Until recently I thought most of the falls were in regard to the situation with a number of issues in SA but now I suspect that up to a year ago the IIs figured out there would need to be another RI.

Plenty of time for trading bounces most probably but more and more it reminds me of Petropavlovsk. In terms of falling sales prices and the consequential hit to the share price leading ultimately to massive dilution. The big difference is there is no debt here to speak of.

Alternatively or as well, did some of Glen's II holders hang on to their Lonmin allocation until the China thing blow up?