BNB - Babcock & Brown

[Mumbank]

I bought these just after the float at $8.00ish and then topped up in January at $16 thinking how smart I was to have sold half my oilsearch holding to buy more BNB!!!!!!!!!! This is very demoralising, and I just can't bring myself to sell them now at under $8. I can't believe they won't rebound. I think I should just stop watching everything at the moment, its gut wrenching.

I'm worried, but I have confidence they will come back. I can;t do much else.

 

[cameron_bol]

Briefly dipped to 7.70, getting a little hairy. What's the worst case scenario here? The banks review B&B's debt terms forcing a fire sale of their assets. Would this just mean a bigger subsequent hit to B&B's share price or something worse?

As an aside, I just had a quick look through their Annual Report and my oh my, their exec's get paid well...

 

[ROE]

That what happen when you are funded by leverage and debt.
Centro, ABS, Alco, BNB and MQG they all have a common theme

 

[awg]

one potentially unpleasant outcome for potential new buyers is that if some covenant is breached, they may announce a trading halt.

then probably re-open lower

forgive my ignorance, but what happens to day short sellers with open positions, if that happens?

tony

 

[YELNATS]

one potentially unpleasant outcome for potential new buyers is that if some covenant is breached, they may announce a trading halt.

tony

Trading status was changed to "pre-open" for a while in the last hour but now is back to "normal". No announcement. A little strange?

 

[awg]

an insignificant ann at 1.15 re gas mou from icn

most probably caused that "pre-open" status to show

regards tony

 

[YELNATS]

an insignificant ann at 1.15 re gas mou from icn

most probably caused that "pre-open" status to show

regards tony

Yes probably, it's trading normally now. I guess a few of us are a bit jumpy about BNB at the moment, maybe awaiting an announcement.

 

[Mr_T]

From http://business.theage.com.au/babcock-nears-meltdown-20080612-2ped.html


Babcock & Brown shares are getting smashed on speculation of hedge funds shorting the stock into oblivion - into the hands of its bankers, that is.

A Babcock spokeswoman has confirmed that if Babcock shares fall to $7.50 that would trigger a $2.5 billion market capitalisation review clause with its syndicate of banks.

The upshot would be a total collapse in market confidence as Babcock would be in a similar basket to Allco and Centro - in the hands of its bankers. The banks would then have four months to do their review

 

[Awesomandy]

an insignificant ann at 1.15 re gas mou from icn

most probably caused that "pre-open" status to show

regards tony

It gave us a chance to grab lunch, I suppose.
Considering that at the moment, there are around 200 buyers but 800 sellers (judging by the orders), it's not looking very good.

 

[yuan84dk]

It gave us a chance to grab lunch, I suppose.
Considering that at the moment, there are around 200 buyers but 800 sellers (judging by the orders), it's not looking very good.

BNB felt into garbage while you were having your lunch boubt the any chance it could come back...

 

[cameron_bol]

BNB felt into garbage while you were having your lunch boubt the any chance it could come back...

Tell me about it.... Good thing I don't have much at all invested. I think I'm gonna stop looking at them, it's depressing...

Edit: Currently at 6.95

 

[bowseruni]

drop it like it's hot....$5 by end of trading day if this keeps up. surely they must bottom out soon

 

[freddy2]

Will be interesting whether BNB will try and push the closing price to $7.50. It's over for them but I wouldn't be suprised if they tried.

 

[yuan84dk]

Will be interesting whether BNB will try and push the closing price to $7.50. It's over for them but I wouldn't be suprised if they tried.

Sure they want to push the price back to $7.70 to get away from the review today. But with what? I think almighty Phil Green now really ran out of bullets!!!!

I think now BOTTOM OF BNB has to be redefined as often as every minute!!! Well, there is always a bottom anyway n you know that? But I dont think Macquarie Group would keep sitting aside for very long.

 

[refined silver]

That what happen when you are funded by leverage and debt.
Centro, ABS, Alco, BNB and MQG they all have a common theme

Exactly. There doesn't have to be a bottom (above 0) if the problem is insolvency.

This is from the US, but will affect Oz.

“Ten companies now have more level 3 assets than capital,” observes Marc Faber . “The three magic words that make an asset a level 3 asset are ‘no observable inputs.’ What this means is that not only are they hard to price, but nearly impossible to sell. Recently, there’s been such deterioration in all types of mortgages that more and more assets are finding their way into this category.”

You might guess what types of businesses are squirreling away level 3 assets, but the ratios to capital are a bit unnerving.

“In order, they are (as a % of total shareholder equity):

1. Bear Stearns: 313.97%
2. Morgan Stanley: 234.88%
3. Merrill Lynch: 225.4%
4. Goldman Sachs: 191.56%
5. Lehman: 171.18%
6. Fannie Mae: 161.48%
7. Northwest Air: 142.02%
8. Citigroup: 125.06%
9. Prudential: 119.36%
10. Hartford: 108.52%.”

And remember, this is only those level 3 assets ON the balance sheet. Many institutions have stacks of toxic mortgage, credit and other swaps currently in structured OFF-balance sheet vehicles.

 

[yuan84dk]

Will be interesting whether BNB will try and push the closing price to $7.50. It's over for them but I wouldn't be suprised if they tried.

As http://news.theage.com.au/business/babcock-in-good-shape-but-shares-sink-20080612-2phi.html

If it is true that the foundamental of the company is still as firm as it was, then personally I think the $7 is not resonable, and the low price would not stay long. Price just went up a bit, probably as short selling positions are colosing out.

 

[Tweaksta]

The question is - could $6.81 be the bottom now?

The price dipped at about 14:45 to hit $6.81 briefly and has come up a bit since then. It has now been over $7.00 for over an hour.

 

[nomore4s]

The question is - could $6.81 be the bottom now?

The price dipped at about 14:45 to hit $6.81 briefly and has come up a bit since then. It has now been over $7.00 for over an hour.

I would doubt that $6.81 will be the bottom, the bounce is probably due to short covering imo.

Would be expecting some sort of bad news to come out shortly. Surely there has to be something behind this sort of fall?

This is hardly surprising in this type of market, these types of companies have been getting hammered overseas and other companies with excessive debt/leverage have already been hammered. Highly risky investment in this environment imo.

MQG next?

 

[Bushman]

I

MQG next?

MQG has the better balance sheet. But then again who knows what lies beneath. Trust no-one is the motto in this god awful credit crunch.

BNB is a sitting duck now. Banks will be all over them like a rash a la Centro, AFG, ABS, MFS. Poor buggers - it was nearly bonus time too. They might be saved by their 'more opaque than AFG' structure, meaning someone can figure out what it is they are buying. But as we have seen with Centro, these banking syndicates are very difficult to deal with given there is a decided stench coming form most of their back yards as well.

Ye gods - tread carefully people.

 

[barnz2k]

please tell me im not the only one still holding BNB

If banks start calling in their loans.. What would happen?
We are at almost a 80% loss since the highest point. crazy.

ahh time travel. If only.