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$40 Billion Worth Of POT Goes Up In Smoke As Merger Arbs Face Un-Merger Monday Massacre
Not a good way to end the weekend for hundreds of merger arbs, who had been betting that the BHP-Potash deal would close one way or another. Bloomberg reports, just before 4:20pm central time that, "BHP Billiton Ltd., the world’s largest mining company, abandoned its $40 billion cash offer for Potash Corp. of Saskatchewan Inc. after Canada rejected the proposal. BHP reactivated its buy-back program." Still, POT will be $350MM richer, courtesy of the break up fee, but it will be small cold comfort as the stock's fate at current elevated levels now depends almost exclusively on a Chinese white (k)night emerging.
Among the major casualties which will be bleeding red ink tomorrow, are the following hedge funds which have established a sizable arb stake in POT (sorted in order of size), after holding nothing prior to the most recent quarter:
- Taconic: 4.55 MM shares as of Sept 30;
- Duquesne Capital: 2.2MM shares as of Sept 30 (then again Duquesne is already history)
- Perry Capital: 1.6MM shares as of Sept 30;
- Franklin Resources: 1.6MM shares as of Sept 30;
- Highstreet Asset Management: 1.2MM shares as of Sept 30;
- Gruss Asset Management: 1MM shares as of Sept 30;
- First Eagle: 0.5MM shares as of Sept 30;
- Giovine Capital: 0.5MM shares as of Sept 30;
- Senator: 0.4MM shares as of Sept 30;
- Lazard Asset Management: 0.3MM shares as of Sept 30;
Oops. And here's to hoping there wasn't a corresponding short in BHP...
In other news, the biggest legal holders of POT in the world are the usual suspects:
- CapRe: 21MM
- BlackRock: 13.7MM
- Primecap: 10.6MM
- Jarislowsky, Fraser: 8.7MM
- Pyramis Global Advisors: 7.4MM
And for full comedic impact, here is Cramer's take: "Despite BHP Offer, Potash Is Still a Buy"
“At
the very least,” Cramer said, “the stock deserves to go out at, yes,
$160 a share, well below its top in 2008 but well above the $143 price
tag where it went out today.”
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with the cramer endorsement, the POT issue is now, decidedly, fucked. probably because his deranged horde of brain dead zombie acolytes havent realized yet that he is telling you to buy stocks at the same time he and/or his buddies are selling them...its on record, in an old interview with aaron trask.
Cramer's had a few doozeys lately:
-- Potash (POT)
-- Cisco (CSCO): http://www.bloomberg.com/news/2010-08-18/cisco-nvidia-are-poised-to-rally-mad-money-s-jim-cramer-says.html
-- Cirrus Logic (CRUS): http://maddmoney.net/jim-cramers-lightning-round-buy-cirrus-logic-inc-nasdaqcrus-sell-el-paso-corporation-nyseep/
-- and my personal favorite: http://www.cnbc.com/id/31388528/Cramer_Housing_Has_Officially_Bottomed
Per Barron's, "Cramer's star outshines his stock picks": http://online.barrons.com/article/SB123397107399659271.html#articleTabs_panel_article%3D1
.Cramer said...IE pink sheets here we come!
One wonders where Cramer bought his Potash stock at. Talk about pump and dump.
Cramer can kiss my red eye.
i'm sensing a theme which i have actually never really had either the wherewithal to probably get or maybe just plain old didn't get but..."deal destruction" is in the air all of a sudden. "busted trades, trillion here, trillion there." know what i mean? i look at General Electric and my thought now is "why hasn't the government put a cease and desist order on them" like they did with Citi? they are playing with taxpayer money still, are they not? and clearly "the purpose of all the wheeling and dealing is"...? i mean "daytrading actual companies" is beneficial to...? it's not like they were ever a real bank....maybe a real "bankst... in any case "they could be making a fortune in the natural gas space....ahh, "the habit...., "ain't no Hobbit, dat's fer sure...ain't no Shire either...." needless to say "the fact that we work for CNBC or Bloomberg doesn't mean...you know...that we'd ever...
Up in smoke....is where the value of your money goes!
in my lungs... and sometimes, up my nose.
Than this is for you...
http://www.ebaumsworld.com/video/watch/441246/
Classic.
I have a rule. Any time a stock I own gaps up on takeover talk, I SELL IMMEDIATELY.
Most recent example for me was TTES. I sold it at $32, now it is at $34. But at least I won't get screwed by having the deal called off and see it gap back down.
LOL...
Anybody like Cramer recommending a stock which is a takeover target is a fool....
Perzactly. Pick up the optimism and premium while its there.
Western Potash Corp. is a junior mining company engaged in the evaluation and mine development of potash mineral properties. Western Potash Corp. intends to build Canada's most efficient potash solution mine at its Milestone property in Saskatchewan.
http://www.westernpotash.com/
Got in @ $.20/ a year ago.
$.92/ on Friday
Great little company I've followed for years.
David, if you know anything about Saskatchewan's geology and the proposed location of the mine, you know their infrastructure costs (water especially) are prohibative.
It's nice that you did well on your investment but going forward I would not be recommending this company to investors who don't do their homework. Nothing will come of this company or mine site for a good 20+ years.
Tube steaks to meat curtains, dollars to donuts, Cramer will be shilling again tomorrow.
Hardly a bloodbath. The Canadian gov't nixed this deal a week ago. It is surprising how little the stock has fallen. It is still above BHP takeover bid price. If the Australians got turned down, what makes anyone think the Chinese will fare any better? In fact, this is a message to the Chinese that they shouldn't consider any oilsands takeovers, but rather just 49% investments, which they have been doing.
Anyone still owning POT after it went from 112 to 148 deserves to lose. Bulls make money. Bears make money. Pigs get slaughtered. Not original but very true. There wasn't enough upside to take the risk of some type of snafu. Take responsibility for your won actions or inactions. Don't blame Cramer or anyone else if your still holding the stock looking for a few extra bucks.
So everyone who tries to get a few extra bucks out of a stock is a pig, and will lose money?
Tim Knight pointed out that "Pigs get slaughtered" is to date, the most useless piece of market "wisdom" ever coined. Another gift from Creamer.
Yes. Do you really need to risk a loss for a "few extra bucks" after the thing went up from 98 in less than two weeks. It's called risk reward just in case you don't know. You risk a deal falling through for "a few extra bucks" I'm sorry I just don't get that kind of thinking. I took the money and ran. Sorry others didn't I guess. Cramer didn't make up the "pigs get slaughtered" and in reality it should be useful in keeping greed in check. After all isn't that what everyone is mad about. Greed. I thought greed was what is supposed to be ruining the country and why Wall Street blows etc... You can't have it both ways.
$40 billion of POT went up in smoke just before 4:20 pm...hahahaha!... priceless tyler!
+420
Thx -- I was waiting for someone to say it!
I don't think POT gets a breakup fee. BHP surely had an out in the event the government didn't sign off on deal. Most of the $350 million relates to fees BHP paid to line up the financing.
Nine bucks ten years ago. Topped out over 200 in 2008. Went to 50 23 months ago. Good value between 80 and 90. MOO.
No matter the outcome, still by far THE BEST TICKER out there ...
Where the schnitzel is the Cramer ETF? You know, the fund that goes reverse on the Cramer recommendation. My the profits we would all reap with that one!
Great idea. I would start with a Creamer Bear 3X Fund (CRZ).
If the Canadian govt didn't allow BHP to take over Potash they most certainly won't allow a Chinese company to take it over.
Let's see. Potash makes fertilizer. Fertilizer is for growing (more) food.
Who has more mouths to feed, China or Australia? Who is going to benefit the most from an Australian company proximate to 1 billion plus of those mouths, set to control the largest source of potash on the planet? If the US can set up naval check (choke) points to control the flow of oil to China they can (and probably did) influence our stupid government to kibosh this deal for "strategic" reasons.
My conspiracy theory for Sunday November 14, 2010.
I had never watched Cramer, so I wasn't sure what to make of the hate on for him on Zerohedge. Having just watched a few of his videos (like the one where he tears up his SEC subpoena!) I can't believe he has any credibility with anyone. He seems like an arrogant maniac, full of bluster but no real substance.
He is the jooish mafia's clown (krusty the clown that is).
This can't be happening; CETIN said it would go up!
That was a killer deal, too.
Canada -- Sovereign pride? Oh my.
if it drops load the boat boyz ...
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