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Post by huh on Nov 19, 2015 7:56:54 GMT -5
I wouldn't start shorting NBG here anyway... NBG trading down ~50% since I posted this only 14 trading days ago From what little I've read of this on another message board, it seems NBG reached a deal on the next portion of bailout aid and is expecting a vote today on a 15 to 1 reverse split and a raise of an additional ~$1.5B (likely diluting common). My guess is that this will see down into the .30's before the reverse split.NBG is now trading in the .30's. One of the reasons that I personally wouldn't short it here now, even if I could find shortable shares, is that I'm confused as to the effect of dilution from the secondary offering. Here's what we know: a 15 to 1 reverse split will take place, ~$1.5B will be raised from a secondary offering, and NBG will sell its Finansbank holding to raise additional capital, but not until after the first two events take place. Because the U.S. doesn't seem to be reporting any details on this, and because what is being reported is all Greek (literally), here's what I DON'T know: When the r/s split will take place and when the secondary takes place. Because of this I don't know whether or not the dilution is already priced in. So I don't know if; 1) the dilution is priced in and the stock will reverse split from here, raising it to 4.50-5.00, or 2) the stock will reverse split from the diluted level much lower than here. I've read two websites now that say the dilution will take the current price down to ~.02 euros, and then the r/s will happen, which would bring the pps back only into the .30's euros (where it is right now but after ~90% dilution!). Option 1 could make it a short term buy since it would likely meet it's ADR listing requirements and continue trading - and past r/s splits in NBG have led to decent rallies shortly after. However, option 2, and the one I think is more likely, means it would likely NOT fulfill it's ADR requirements and would go the way of some of the other foreign bank ADRs such as EGFEY and IRE by being delisted, pink sheeted, OTC, or whatever the correct term is. Either way, I believe current common shareholders are being majorly screwed and the answers to the question above would likely only determine how long before the ADR goes OTC.
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Post by huh on Nov 19, 2015 8:08:46 GMT -5
Which brings me to something I've noticed about ADRs...
Over the last few years, holders of bank ADRs at least have been getting screwed. ADRs have been used as a way to siphon easy money back into their companies/countries through secondaries and all sorts of fancy stock engineering. Maybe it's their way of getting back at U.S. investors/banks for the bad mortgage loans they were sold prior to the 2008 fallout, I don't know.
In any case, I mentioned recently how two of China's largest U.S. ADRs, two of the largest companies in the world, are also two of the most undervalued mega cap stocks out there. Does this have something to do with them being ADRs? Will these ADRs perhaps see their own share of dilution in the future?
I wonder if this isn't why BABA decided to list directly in the U.S. instead of in China and then offering an ADR to U.S. investors. I also wonder if this doesn't make BABA a better play on China in the long term (but not here, not until the market sees a major pullback)
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Post by huh on Nov 19, 2015 19:00:44 GMT -5
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Post by huh on Nov 19, 2015 19:24:45 GMT -5
I'm only researching/watching what's happening with NBG because I'm interested in how it might affect the euro. But here's what really gets me. Why did this stock even trade higher than, say, 10 cents since 10/23? I knew it was going to near zero simply by reading a graphical representation of it's previous stock price movements (aka a chart). My NBG target is now 0 (as in zero, Ø, nought, love, null, zilch, nil, zip...) I wasn't doing any fundamental research on this stock at the time. So if I knew from a chart, this means that the insiders knew, the banks knew, and the MM's knew. The only ones that didn't know? The retail shareholders who held on or continued buying as the price was instead slowly walked down. Fair markets my a$$ So now we know the fair price. That's ~2 pennies, or ~.30 after the 1 for 15 reverse split (and only until the additional offering on 11/30). But watch if this doesn't trade in the .30's for a bit (pre-split price) only because it'll confuse the retail buyers who'll likely step in and buy more thinking that it's now fairly valued. And that's why I suggested not shorting it lower than .30's - too easy to confuse and screw retailers.
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Post by birthmark on Nov 19, 2015 20:04:21 GMT -5
You've been on this from way back Huh. Amazing how the retailers get screwed -- again and again.
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Post by huh on Nov 19, 2015 20:12:58 GMT -5
You've been on this from way back Huh. Amazing how the retailers get screwed -- again and again. One of the oldest charts I have on here. I remember feeling bad because I said to short it in 2013 ~$21 (at the previous site), and it overshot that day to ~24.00. Boy did Maxi give me a razzing on that one.
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Post by travis on Nov 19, 2015 20:29:10 GMT -5
so is this a buy at 30 cents tomorrow
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Post by huh on Nov 19, 2015 21:31:22 GMT -5
so is this a buy at 30 cents tomorrow If this stock jumps big after the reverse split, it's really only an advantage right now for existing holders to sell (unless you're a really good swing trader). If you're looking to buy for a long term hold, remember two things: 1) Even more shares are to be offered publicly on November 30 at .02 each. You'll get an opportunity to buy it cheap, and, 2) As per NYSE listing requirements, any stock is in danger of being delisted if it sees 30 consecutive days of closing under $1. I think it's already closed something like 84 consecutive days under $1. This secondary doesn't even get it back over $1, so it doesn't help with that at all. Most likely, this will go the way of EGFEY and IRE where it'll be delisted and then traded as an OTC. That's not likely going to help it's market cap increase and should at least give all kinds of chances to those wanting to buy cheap. Greece could go forward and prosper as a country and NBG could go on to make all kinds of money in the future, but that doesn't necessarily mean that holders of an ADR will benefit from it.
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Post by Troy on Nov 19, 2015 22:23:36 GMT -5
So if I bought about 18k at .5 on Monday should I sell tomorrow or hold on? I managed to buy in at the absolute wrong time it feels like.
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Post by huh on Nov 19, 2015 22:26:19 GMT -5
NBG could perhaps sell Finansbank to meet the ECB's adverse scenario requirements. But considering all things - not knowing how much NBG can actually sell Finansbank for, NBG's pps history since past reverse splits and secondaries, the very real threat of being delisted and following in the footsteps of EGFEY, and the 11/30 .02 cent offering yet to come - I have to wonder why anyone looking to hold this long term would be willing to pay more than .02 cents? (or .30 post-split - I still don't know when the actual reverse split goes into effect)
Also, all of this recapitalization only helps NBG to meet ECBs requirements so that they can continue getting funds - they still have the whole bank related issues to deal with - you know, how to actually make money.
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Post by novie08 on Nov 19, 2015 22:30:18 GMT -5
Greece could go forward and prosper as a country and NBG could go on to make all kinds of money in the future, but that doesn't necessarily mean that holders of an ADR will benefit from it.
Exactly. But with France in scary territory (economically), it doesn't look too promising in the near future. JMHO and GL to everyone. And many thanks for your charts and opinions huh. What a trade a short at $21 would have been in spite of that pop!
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Post by Troy on Nov 19, 2015 22:31:59 GMT -5
So would pulling out now be a wise decision? I still don't really understand exactly what's going on and kind of hopped in without thoroughly understanding the current situation.
My questions is this: What factors will cause the stock to jump in the next few weeks and if what will cause it to drop? Given these factors would it be best to pull out first thing tomorrow morning and accept my losses?
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Post by huh on Nov 19, 2015 22:35:31 GMT -5
So would pulling out now be a wise decision? I still don't really understand exactly what's going on and kind of hopped in without thoroughly understanding the current situation. My questions is this: What factors will cause the stock to jump in the next few weeks and if what will cause it to drop? Given these factors would it be best to pull out first thing tomorrow morning and accept my losses? See what it does early tomorrow. The only factor that I can think of to cause it to pop in the near term would be trader confusion with the reverse split. Although it sounds nuts, it's not totally impossible that this doesn't jump huge on the split because retail traders are thinking 15x.30=4.50. And they'd be right. But the correct formula is actually 15x.02=.30. See how some might be confused? They might be buying it all the way down from 4.50-.30 before realizing what actually happened. It's a long shot, but it's a shot. I really wish I knew when the reverse split goes into effect. Still trying to find the date for that.
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Post by Troy on Nov 19, 2015 22:38:21 GMT -5
So if the reverse takes place the value of my stocks will go from the current value (e.g .30) to .02? Essentially losing 90% ?
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Post by Troy on Nov 19, 2015 22:51:23 GMT -5
Or will the split have no effect on the ADR because it's actually just a reflection?
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Post by huh on Nov 19, 2015 22:51:19 GMT -5
So if the reverse takes place the value of my stocks will go from the current value (e.g .30) to .02? Essentially losing 90% ? The reverse split doesn't cause any loss to the value of your total investment. You simply get less shares that are now worth more. The net change is zero. What causes the loss in value is NBG offering more shares for sale at a far lower price per share than the current price (commonly called a secondary - or in this case, "the offering").
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Post by huh on Nov 19, 2015 22:53:24 GMT -5
And speaking of confusion: See what I mean? I don't know, maybe I'm wrong. I'm no analyst. I'm no pro. I can barely get my head through some of the SEC filed forms. I read charts, and predict future stock movements based on those readings. And this chart told me that this stock was going to zero, or very near it. That's now being confirmed. I'm only posting this stuff trying to help some confused traders out. I could be totally wrong.
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Post by Troy on Nov 19, 2015 23:01:17 GMT -5
Okay, starting to slowly wrap my head around this. It hurts bad to accept a 30% + probably higher tomorrow morning but if it's only going to go down from here then I likely will do it.
The whole reason I switched my money to the NBG ADR was for a quick gain but also accepting a potential quick loss. I was originally in GoPro and have been for a hell of a ride on that - any thoughts on where that stock will go?
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Post by huh on Nov 19, 2015 23:22:43 GMT -5
Okay, starting to slowly wrap my head around this. It hurts bad to accept a 30% + probably higher tomorrow morning but if it's only going to go down from here then I likely will do it. The whole reason I switched my money to the NBG ADR was for a quick gain but also accepting a potential quick loss. I was originally in GoPro and have been for a hell of a ride on that - any thoughts on where that stock will go? Ouch. From the frying pan to the fire, huh? I advised to short GPRO when it was trading @ 79.07 (that post is here) GPRO may pop some here in the very near term, but I think it'll see ~14.50 yet. When/if it gets there, need to re-evaluate both it and where the overall market stands at that time.
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Post by huh on Nov 19, 2015 23:28:26 GMT -5
Speaking of GPRO and secondaries - anyone remember when GPRO did a secondary ~79.00? Here's what I posted back then: Here's how I read the GPRO secondary: MM's & insiders want to insure that they sell near the highs. However selling $800 Million worth of stock on the open market wouldn't allow them to do that. So they offer a secondary near the highs and earmark those shares as sellable at or near the current price to themselves at a later date - even if the stock is lower then... Well, the stock has been and is lower. But I bet those insiders had no trouble unloading their shares.
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