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Iron Ore

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about $9

why so cruel ,
FMG went to the foreign investors and borrowed in US dollars

now the real predators love squeezing the debt of a quality company ( no fun grabbing a box of broken parts , unless you are the WES board )

freeze some funds here , renegotiate a new deal there

unless the governments ( state and Federal ) protect FMG when needed it is a big plump cash generating target but might not be big enough to chew up the predator first ( remember the predator only needs access to funds, and does not need to be a success business itself )they used to be called Corporate Raiders but the new SPAC trend looks very similar .

has been a persistent trend of inaccurate analyst reports elsewhere on take-over victims , that stellar reputation of FMG would be a shiny target as well

the question that is always asked in such situations is

will the loyal share-holders rush in and support management ( by voting and buying the cheaper shares , and any accelerated SPPs ) you can't trust the instos the bottom line is short-term profits and losses
 
I am not sure I understand where you see the problem. If you like we can head over to the FMG thread and you can explain it to me, but here are some points I think take away the risk I think you might be talking about.

FMG have $0 net debt, meaning they have more cash sitting on the balance sheet than they have cash, so they could pay out their debt at any stage.

not to mention that the debt is long term bonds and not due to be paid back for quite some time.

the debt is also in US dollars, but that’s no issue because Iron Ore is traded in US dollars, so the debt is in the same currency as their earnings.

As for loyal share holders, we have an 800 pound gorilla by the name of Andrew Forrest that owns more than 35% of the shares, and he is the chairman of the board, So I see no risk of take over plays or other games
 
gorillas can be shifted look at TPG/TPM

and Andrew Forrest seems to be the guy who will not 'fight dirty' when confronted with a rapacious predator

i like AF because of the person he is , but others might see him as an easy target ( with a very juicy company just awash with cash-flow ) remember several analysts have been busted for outright lying for pay or part of the short-selling campaign ( and worse they publish only to selected buddies and certain media

i also hold HSN , hold the debris of HHL ( now PCG ) and HHV ( now PIA )

so i have seen what happens when gorillas are shifted

i think in a world awash with free cash ( for some ) FMG is a prime target in Australia , small enough for a consortium to avoid FIRB and ACCC probing ( heck they have already tried on SYD )

cheers
 
Or both high commodity prices and falling usd
 
There is no way Andrew wouldn’t put the boxing gloves on to defend FMG.

but what exactly are you worried about, what are the mechanics of the Possible situation you see happening?

I honestly can’t see any way some one could take advantage of FMG.
 
Value Collector said:
I honestly can’t see any way some one could take advantage of FMG.
Click to expand...
If the Berkshire Hathaway management weren't so set against resources, Fortesque would make an ideal addition to their portfolio. Fortesque is a cash generation machine, which is one of the attributes that Berkshire Hathaway dearly loves in its subsidiaries.

However, I do agree with you in that it would take a great deal for Forrest to agree part with Fortesque. Whether or not Berkshire Hathaway is willing to pay up, only the future will tell.

KH
 
and many predators are nowhere near as nice as Berkshire ( who loves to gain positions with convertible bonds , preference shares and warrants )

and the current SPAC trend means the predator can do it without much of their money ( they don't even have to convince the investment banks this time .. just pension funds and such )

time will tell

it is just FMG would be such a juicy target
 
I think you are letting your imagination go a bit wild there, but either way, a take over offer would cause the price to rise, not drop.
 
I suspect that Twiggy will always be a buyer for FMG shares if the price dips unreasonably. He owns 35% already and currently draws $2billion plus a year dividends.. (unreal isn't it ?)

Earlier this year in late March when there was a dip to around $18-19 as a result of another negative stock analysis he bought 10,000,000 shares for $193m at market. Not a bad deal was it ?
 
i believe there are limits to how rapidly a major holder can accumulate more stock ( without a formal take-over declaration )

HOWEVER a consortium of major holders might decide they control 70% of the company and make a move to take the company private ( as happened to me in TMM )
 
I guess you could imagine situations for any business listed on the stock exchange, better just stick to cash if those sorts of fantasies keep you up at night.
 
if they were solely my fantasies , there would be no regulations on such

N. Politis ( of APE fame ) is very aware of the limits to his accumulation of APE shares

he currently controls 27.06% of the company but that has been higher before the AHE merger which diluted his holding % ( not the number of shares held )

and TMM going private happened to me several years ago ( despite me voting against it )

the question is will Twiggy need to negotiate such rules if his company is the target of a hostile take-over

plenty of directors in other companies eagerly take the first offer
 
The fantasy is that FMG could be the victim of a hostile take over, but as I said even in the event of a take over the share price would go up, not down.
 
Value Collector said:
It’s also obviously not just shipping containers, ....
Click to expand...
Could put this in the Inflation thread, or Baltic Dry, or any number of places. Bunnings?


'UNPRECEDENTED': The global shipping crisis could take years to unwind... and here's why Australia could be hardest hit - Stockhead

'Unprecedented', 'abnormal' and 'astronomical'. Those are some of the phrases that have been used to describe the post-Covid global shipping crisis.
stockhead.com.au
 
The spot price of iron ore plunged near 15 per cent on Thursday, extending a rapid retreat, as demand for the steel-making material seemingly fades at an unprecedented pace as supplies edge higher.

The spot price has now tumbled more than 44 per cent from the record high set in May, based on either Fastmarkets MB or S&P Global Platts pricing.

Fastmarkets MB said its benchmark price fell $US20.73 to $US132.66 a tonne on Thursday; it put the peak at $US237.57 on May 12. S&P Global Platt’s benchmark fell $US22.85 to $US130.02 on Thursday; it put the peak at $US233.10 on May 12.

The most traded iron ore futures on the Dalian Commodity Exchange, for January delivery, closed down 7.2 per cent to 763 yuan ($US117.44) per tonne, after plunging to 8 per cent earlier during the session.

Steel prices on the Shanghai Futures Exchange also tumbled.
 
Is anyone aware if actual tonnages of ore have fallen in the last few weeks ? We know the price has dropped but at $160 a ton the miners are still doing very well. Far more loss IMO if sales start to slide.
 
there was some reports of reduced activity in certain ports , at least one in China and one in the US
so are the tonnage slides because of demand or logistics
 
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