Posted on 06/10/2003 10:50:24 AM PDT by MeneMeneTekelUpharsin
DALLAS (CBS.MW) -- Shares of Mirant took a dive Tuesday after it was reported that some of the power generator's bondholders are planning to derail a debt exchange offer that the company needs to complete to avoid bankruptcy. On June 2, Mirant (MIR: news, chart, profile) announced a plan to exchange $1.45 billion in unsecured debt for new secured notes with later maturity dates. The Atlanta-based company is also trying to refinance $3.45 billion of bank debt. See archived story.
In recent dealings, shares plunged 23 cents, or 9.1 percent, to $2.31 on heavy volume of 14.3 million. Citing unnamed sources, Reuters reported that holders of Mirant Americas Generation LLC debt are planning to file suit to block the debt exchange because they believe the deal favors holders of Mirant Corp. debt. James Peters, a Mirant spokesman, said he wasn't aware of any bondholders unhappy with the exchange offer and, to his knowledge, there has been no lawsuit filed against the company.
Here's the Yahoo chart for today:
LOL. Just posting the news about Mirant. Sometimes it's good, and sometimes it's bad. This is a VERY interesting stock to watch. If the refinance goes through, a lot of investors will do very well. If it doesn't go through, a lot of investors will be crying. It would be wise to do thorough d&d before investing. However, it IS FUN TO WATCH and talk about in the interim...at least in my opinion.
Some big boys took advantage of the news (in my opinion) to try and short sell the thing below $2.50 and keep it there, thus triggering margin calls (which probably can't be met) and causing MORE shares to be sold accelerating the decline. Then, the short sellers will cover AND buy shares to go long and make a killing. That's my opinion as to what is going on and we'll see within about two months whether I am right or not. Each individual posting here probably has an entirely different opinion.
However, it's a new day and I believe energy trading will be back in vogue before too much time passes.
I would agree. It has unduly affected SEVERAL energy producers. Some of them have recovered and others haven't. One or two have gone bankrupt. A major difference between Enron and many of the others is that Enron was trying to be "asset-free" and most of the IPPs (Independent Power Producers) have an incredible amount of assets to be pledged as collateral for loans.
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