BBI - Babcock & Brown Infrastructure

[drsmith]

I, for one, cannot believe how much of a ride we're being taken for.

I'm amazed that so soon after a reasonably positive announcement, which pushed the shares up to nearly 20c, we have a negative announcement, which has halved that (and more).

With regard to that so-called reasonably positive announcement, look at the reconciliation of EBITDA to operating cash on page 15 of the analyst's presentation and deduct the figures from the first half (the latter can be found in the previous 6-monthly analyst's presentation).

With regard to BBI's management, their primary focus will be to keep their own jobs.

 

[drsmith]

Well I'm out, the risk reward equation does not stack up for me any longer. I've seen an unrealised profit of over $200k turn into a realised profit of just over $30k.

I've tried to rationalise the outcomes logically, but now I simply do not trust what the BBI board is telling us. When I first read the announcement last Friday I let logical thought prevail over instinct and held, an expensive mistake but then thats life.

A $30,000 profit is worthy of contraulations. It's far better than what the vast majority of BBI's loyal investorship will ever see.

As for the BBI board they have never been trustworthy. The primary objective of this vehicle was after all a highly leveraged fee machine for the now expired parent. The financial enrichment of it's investors was always secondary.

 

[Mitsimonsta]

Well I'm out, the risk reward equation does not stack up for me any longer. I've seen an unrealised profit of over $200k turn into a realised profit of just over $30k.

Congrats Yakka... been some 'hardyakka' this BEPPA business eh?

$30K will be nicely reinvested somewhere I take it? Tips always appreciated!

I took $1K profit from my $2600 invested on Friday. Was feeling sick to the stomach that it was nearly $1500 less than what I could have had prior to the halt. All that changed this morning which put me into loss territory (and still is).

Right now I am thankful for my profit, and have learned some lessons from the results announcement spike.

 

[jc_trader]

"Sep 06, 2009 (The Australian Financial Review - ABIX via COMTEX) -- BAM | Quote | Chart | News | PowerRating -- Brookfield Asset Management is to become a cornerstone investor in Babcock & Brown Infrastructure under the embattled fund' recapitalisation plan. The success of the proposal requires stockholders to agree to a large dilution in their holdings by swapping hybrids and preference shares for ordinary stock. The $A1.5 billion deal will help the fund to lower its debt. "

Not good news

 

[hardyakka]

I reckon if I work out the $ return per hour of research then I would have made a lot more working the chip pan at maccas, but it was fun anyway.

The BEPPA price has bounced a bit, but reading that snippet on $1.5B bening put in by the deep value investor makes the risk reward equation even worse. The dilution is going to be 50% more than in the two scenarios I posted.

If I held any BBI I would get out of them now as they will be worthless once dilution occurs, and that is looking to be a certainty. The BEPPAs have replaced the BBi as the spec play.

But then I cannot tell the future so follow your instincts.

Cheers

 

[hardyakka]

Congrats Yakka... been some 'hardyakka' this BEPPA business eh?

$30K will be nicely reinvested somewhere I take it? Tips always appreciated!

I took $1K profit from my $2600 invested on Friday. Was feeling sick to the stomach that it was nearly $1500 less than what I could have had prior to the halt. All that changed this morning which put me into loss territory (and still is).

Right now I am thankful for my profit, and have learned some lessons from the results announcement spike.

I am steering away from speccies, AJA is a property trust paying a yield of about 16%, looks pretty good to me on analysis. I first acquired some in the 20s and just doubled my holding again.

They seem to be highly geared but this is the japanese market and there are some quality posts over the road on AJA. Not that I ever go there as I was banned a long time ago <s>, I posted on this forum how to "correct" such matters

Cheers

 

[jono1887]

I reckon if I work out the $ return per hour of research then I would have made a lot more working the chip pan at maccas, but it was fun anyway.

The BEPPA price has bounced a bit, but reading that snippet on $1.5B bening put in by the deep value investor makes the risk reward equation even worse. The dilution is going to be 50% more than in the two scenarios I posted.

If I held any BBI I would get out of them now as they will be worthless once dilution occurs, and that is looking to be a certainty. The BEPPAs have replaced the BBi as the spec play.

But then I cannot tell the future so follow your instincts.

Cheers

How long will it be until the dilution takes place?? And what do you think the price will fall to after the dilution??

 

[banska bystrica]

How long will it be until the dilution takes place?? And what do you think the price will fall to after the dilution??

Probably quite a few weeks but it may not happen at all. If it does happen, the dilution will be horrendous rendering the current BBI virtually worthless (1c or less in my opinion) and if it doesn't go ahead, administration is highly likely as the $205M due on Oct 30 will be called in.
If you own BBI, you are stuffed either way.

The only way I will enter BBI is via an institutional/sophisticated investor placement AFTER the BBI/BEPPA/SPARCS massacre takes place.

 

[ironmonkey1]

Probably quite a few weeks but it may not happen at all. If it does happen, the dilution will be horrendous rendering the current BBI virtually worthless (1c or less in my opinion) and if it doesn't go ahead, administration is highly likely as the $205M due on Oct 30 will be called in.
If you own BBI, you are stuffed either way.

Doesn't the market price the CI's portion of the dilution in the day(or few days after) of the announcement?(if the deal is going ahead)

Im guessing the SPARCS portion of the dilution will be priced gradually as November approaches(or prob a few days before the conversion date).

 

[seen]

I was one of the lucky ones that bought BBI for 6.3c and sold at 10.5c after the report.

After monitoring BBI, I too have a feeling that management is up to something sneeky. Not to the long term favour of BBI investors, but for the lucky/skillful traders, it still looks attractive because of the massive swings on the first couple of days after an announcement.

 

[$$Punt$$]

Anyone notice that when BBI SP shoot up, so does BBP. Now BBI is falling sharply, so does BBP. Though they are seperate entity now, many investors think they are still brothers in arms. Any comments????

 

[boronia]

Here's an alternative take on why the ASX refused a trading halt by BBI recently (from BusSpec this morning)

Over at Babcock and Brown Infrastructure, there's consternation that BBI's potential rescue deal via a cornerstone investor could actually be worse for retail shareholders than a wind-up. Matthew Spence of Merrill Lynch has calculated that existing shareholders could own under 9 per cent of the company after a placement is made and the likely conversion of all hybrid notes. Then again, it’s a matter of opinion whether the alternative, an asset fire-sale, would deliver much more value. At least the ASX has sided with the average punter, refusing a BBI request to leave shares in suspension until the cornerstone deal is done. That way shareholders can chose whether or not to keep or sell their stakes, sometimes the only choice investors have.

 

[deano9801]

My first trade was BHP, and was so bored I went to the other end of the spestrum with BBI. I initally investested $2500 in both BBI and BEPPA and sold Beppa at .11 and BBI at .047. I'm walking way with $2100, but have learned a heap. So thanks to BB and the rest of you. Just have to learn how to control the emotions when on a roller coaster- felt a bit sick afterwards!. Love to look into some more speckies if anyone would like to share.

 

[jono1887]

well it looks like the slaughtering has stopped and its now stablised at .045.... where to from here??
it the market waiting for another announcement??

edit: perhaps i spoke to soon.. looks like its going down again

 

[skyQuake]

well it looks like the slaughtering has stopped and its now stablised at .045.... where to from here??
it the market waiting for another announcement??

edit: perhaps i spoke to soon.. looks like its going down again

Would like to see a proper capitaulation before I touch this one. The upswings shows theres still hope/greed in some punters.

 

[artsmith]

i smell a rat with management, so i have decided to cut losses and bail, there seems to be too much manipulation on these stocks,
lessons learned the hard way, start again with other stocks

good luck if your hanging in there, its beyond my knowledge base, i just started trading BBI when all hell and lies broke loose, and what a whack i got

cheers

 

[stocksontheblock]

i smell a rat with management, so i have decided to cut losses and bail, there seems to be too much manipulation on these stocks,
lessons learned the hard way, start again with other stocks

good luck if your hanging in there, its beyond my knowledge base, i just started trading BBI when all hell and lies broke loose, and what a whack i got

cheers

I agree, I owned some - well a lot - of these a few months ago. I had quite a few at top $, and made - what could have been a very silly mistake, to buy them as they kept falling.

Lucky for me that I picked up a bundle in the very low cents, and when they jumed to 20 cents I bailed and thankfully ended up with a nice tidy profit.

However, I lost a few pounds sweating on this stock, and just dont see a future, thats's why I got out them, and have never thought about getting back in, no matter how cheap they become as I just cant see how they will do it.

 

[$$Punt$$]

I agree, I owned some - well a lot - of these a few months ago. I had quite a few at top $, and made - what could have been a very silly mistake, to buy them as they kept falling.

Lucky for me that I picked up a bundle in the very low cents, and when they jumed to 20 cents I bailed and thankfully ended up with a nice tidy profit.

However, I lost a few pounds sweating on this stock, and just dont see a future, thats's why I got out them, and have never thought about getting back in, no matter how cheap they become as I just cant see how they will do it.

The price is already so low....I would not sell but hang on to it and hope it will rebound pretty soon when the annoucement comes. Worst case scenario the company go under but its a risk I am prepared to gamble. On the balance of probability, the company going under within the next few months is slim.

 

[stocksontheblock]

The price is already so low....I would not sell but hang on to it and hope it will rebound pretty soon when the annoucement comes. Worst case scenario the company go under but its a risk I am prepared to gamble. On the balance of probability, the company going under within the next few months is slim.

Good luck! Hope it works out for you.

Think the same thing was said about BNB and ABC Learning, and the list goes on.

 

[jono1887]

The price is already so low....I would not sell but hang on to it and hope it will rebound pretty soon when the annoucement comes. Worst case scenario the company go under but its a risk I am prepared to gamble. On the balance of probability, the company going under within the next few months is slim.

what makes you think that it wont go under?
btw.. whats the process after a company goes under.. do stockholders see anything at the end?