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More important thoughts on HUN, Money chart & free video.Enjoy
Fellow Traders,
One of the most profitable saying on Wall Street is "Buy the Rumor and Sell the News". Now just what is this news you may ask? Not all news is created equal. Not just any news - only news that can move the market. My job is to teach you the news that matters and how to interpret that news. News interpretation in regards to trading can take years and many market cycles but you do need to understand the news fundamentals if you wish to become a superior trader.
Last week Congress was going to hold hearings Thursday on Mark-to-Market Accounting or FAS 157. Right from the week's beginning our politicians could not wait for the hearing and jumped the gun on Tuesday. NET traders properly anticipated the news and the market rallied about 85 S&P points from the 12-year lows. Whether this is just another bear market rally or a bottom only time will tell. See Friday’s notated 30-minute posted chart. If you do not have the codes just call me.
HUN Update and Thoughts - I’m looking for a significant breakthrough sooner than later
While 2008 and 2009 may be one the worst back-to-back global economic years ever, HUN’s management is rather upbeat and should have as much as $1-$3 billion in cash from banks and insurance claims. Claims are now for over $7 billion and chances of banks settling before the June 8th trial date seem high. Furthermore, I put winning at trial over 70%!
Here is potentially what HUN may look like at end of 2009:
- Share holders Equity $3 billion and Debt of under $1 billion - book value of $12-$15
- Has one of the strongest balance sheet amongst the specialized chemical companies worldwide
- Plant capacity has greatly increased by new plant completions in Saudi Arabia, Germany, Russia and U.S.
- Is a low cost and technology leader in over 90% of their businesses
- Has a cost advantage that will be even greater because HUN will have little or no debt unlike it's greatly hobbled competitors
- Will have a multi-billion dollar war chest to buy troubled assets for pennies on the dollar
Please try to name one company that can come through this semi-depression like HUN can. HUN core businesses are strong and well positioned to make money or via a big financial by legal settlement!
Corporate directors are doubling their insider purchases and have been buying more stock over the last week. Peter Huntsman bought well over 500,000 shares since December, doubling his personal stake. By the end of 2009, HUN may very well be worth MORE than the $20 a share! I am with them Big Time.
Yahoo message board thoughts as of Friday from one blogger writing about Joshua Harris, a principal at Apollo:
“Joshua Harris -- Epicenter of the action. He clearly could NOT perform on the HUN takeover for Hexion without the continued support from the Banks.
He is a principal / partner of Hexion/Apollo. He was a principal dealing with HUN.
He was a principal dealing with CS [Credit Suisse] & Deutsche [Bank], arguably the MAIN person dealing with BOTH HUN and the Banks. He was a named defendant by HUN in their action again at Hexion/Apollo. He was a key decision maker in paying $1 Billion to HUN settling the HUN action against Hexion/Apollo.
His firm stands to make 20% of any monies over $500 million HUN receive from the Banks only BEFORE trial. His credibility and testimony in front of the Texas jury probably decides the case and the amount. His deposition that will highlight what he will say to the Texas jury takes place next Tuesday and Wednesday March 17 th and 18th.”
My Concluding Thoughts
Joshua should be highly motivated to tell the truth how the banks forced him to renege on a "rock solid" agreement to buy HUN and thus caused him and his companies to pay HUN a $1 Billion. By next Wednesday his full story will be well known to CS & Deutsche. These are exciting times for all HUN shareholders and Joshua Harris is at the epicenter of the action.
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