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The New Normal: From $1 Billion IPO To Bankruptcy In 6 Months

Tyler Durden's picture




 

"Surprises like this are poison to the stock market, and this is one of the big surprises," exclaims the head of listing for Nasdaq's Copenhagen exchange as OW Bunker A/S - a marine fuel bunker company - went from $1 billion-plus IPO in April to bankruptcy today.

From $1billion IPO to bankruptcy in just over 6 months...

 

As Bloomberg reports,

Investors in OW Bunker A/S woke up to a string of horrors yesterday.

 

OW Bunker, which provides fuel to the marine industry, said on Wednesday shortly before midnight that it had lost $275 million through a combination of fraud committed by senior executives at its Singapore office and poor risk management. Its shares have been suspended since Nov. 5 and the company says its equity has been wiped out.

 

Just eight months ago, investors drove OW Bunker’s shares up 21 percent in their first day of trading, following an initial public offering that valued it at almost $1 billion.

 

“There’s no doubt this case is damaging to investors and the stock market,” Borring said. “The stock market depends deeply on the relationship of trust between investors and companies.”

 

According to Niels Henrik Jensen, chairman of OW Bunker, the Singapore employee behind the alleged fraud “turned up at the company’s office and told his manager” what he’d done. Jensen declined to provide more details.

 

“I can’t speculate on how long this has been going on, I didn’t speak to the man myself,” he said. “We’re still not sure whether this was actually illegal -- that’s being investigated.”

 

...

 

The company said it lost $125 million through the alleged fraud at its Singapore office. Separate from that, it said it also lost $150 million following a “significant risk management loss” and has as a result fired its head of risk management, Jane Dahl Christensen.

 

The banks who helped bring OW Bunker to market all say they’re as shocked as anyone else by its revelations over the past two days.

*  *  *
And then today...

  • *OW BUNKER - BANKRUPTCY ORDER ISSUED

Consequences? None of course, but one must commend Morgan Stanely as lead right underwriter on the March IPO for another underwriter diligence bang up job.

Oddly enough, nowehere in the IPO prospectus risk factors do we read: This company may be bankrupt 8 months after this offering."

 

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Fri, 11/07/2014 - 15:18 | 5424639 Black Forest
Black Forest's picture

OKW Fuehrerbunker?

Fri, 11/07/2014 - 15:24 | 5424667 nope-1004
nope-1004's picture

Underwriters win, investors lose, management claims ignorance.  Any different from all the other recent IPO's (that have yet to be revealed)?

 

Fri, 11/07/2014 - 15:38 | 5424737 kaiserhoff
kaiserhoff's picture

Hopefully, they still have enough left in petty cash,

  for a few nail guns.

Fri, 11/07/2014 - 15:49 | 5424788 knukles
knukles's picture

Where's kin I gets me sum dem IPOS?  Momma say day be as goods de IHOPS.

Fri, 11/07/2014 - 15:59 | 5424840 kaiserhoff
kaiserhoff's picture

IHOP is only good when you're really drunk,

  yet somehow, that's never a problem;)

Fri, 11/07/2014 - 16:26 | 5424932 max2205
max2205's picture

And poof! It's gone!

Fri, 11/07/2014 - 17:09 | 5425096 wallstreetapost...
wallstreetaposteriori's picture

thats called price discovery

Fri, 11/07/2014 - 18:44 | 5425419 Vampyroteuthis ...
Vampyroteuthis infernalis's picture

MS has their signature on the obituary. 

Fri, 11/07/2014 - 15:49 | 5424790 astoriajoe
astoriajoe's picture

Do they make hollow point nails yet?

Fri, 11/07/2014 - 15:55 | 5424815 Doubleguns
Doubleguns's picture

And it's gone!!! 

 

https://www.youtube.com/watch?v=-DT7bX-B1Mg

 

Just could not help myself. Sorry all.

 

 

Fri, 11/07/2014 - 16:04 | 5424864 Groundhog Day
Groundhog Day's picture

if it was GS they might have been able to undo all the trades (for a second nominal fee of course)....MS  sorry out of luck

Fri, 11/07/2014 - 18:02 | 5425282 SAT 800
SAT 800's picture

Well it'll probably be a while before we get around to investigating the failure of FacePlant and Tweeter. But probably, their Bankers will be "surprised" too.

Fri, 11/07/2014 - 22:23 | 5426211 motor_angel
motor_angel's picture

my roomate's step-mother makes $75 hourly on the internet . She has been without a job for 5 months but last month her paycheck was $20377 just working on the internet for a few hours. Get More Info... www.Yelptrade.com

Fri, 11/07/2014 - 15:18 | 5424641 kowalli
kowalli's picture

Consequences? - bonuses and promotions

Fri, 11/07/2014 - 15:21 | 5424651 NYPoke
NYPoke's picture

I know how the North Koreans would handle this.

Fri, 11/07/2014 - 15:31 | 5424702 Eyeroller
Eyeroller's picture

Woof, woof...

Fri, 11/07/2014 - 15:21 | 5424655 DetectiveStern
DetectiveStern's picture

BULLISHit.

Fri, 11/07/2014 - 15:29 | 5424656 Frank N. Beans
Frank N. Beans's picture

yes we can't

Thanks for playing another game of Wipe You Out brought to you by your friendly neighborhood banker.

Fri, 11/07/2014 - 15:21 | 5424659 Racer
Racer's picture

Fraud, yeah no surprise there and the banksters didn't know? More like knew all!

Fri, 11/07/2014 - 15:24 | 5424670 Osmium
Osmium's picture

I can't think of a better reason to buy moar stawks.

Fri, 11/07/2014 - 15:25 | 5424671 FuzzyDunlop21
FuzzyDunlop21's picture

Well the problem is the guy confessed. As long as no one ever confesses to anything all you need to do is BTFD

Fri, 11/07/2014 - 20:10 | 5425714 Publicus
Publicus's picture

He was unable to be suicided before the confession.

Fri, 11/07/2014 - 15:27 | 5424682 boattrash
boattrash's picture

YeeeHaawwwwAaarrrghh. The sound of an investor when he realizes that he's not floating high, but rather getting assfucked hard enough to lift his feet off the ground...

Fri, 11/07/2014 - 15:30 | 5424700 taketheredpill
taketheredpill's picture

 

 

 

 

Jane Dahl Christensen will also be sued for fraud for pretending to be a woman for 10 years.

 

http://owbunker.com/staff-members/jane-dahl-christensen/

 

 

Fri, 11/07/2014 - 15:32 | 5424711 Eyeroller
Eyeroller's picture

A dangerous precedent for Yellen...

Fri, 11/07/2014 - 15:36 | 5424728 Rainman
Rainman's picture

good gawd ..now I'm sure the end of the world is near.

Fri, 11/07/2014 - 15:39 | 5424744 ebworthen
ebworthen's picture

Wow - they weren't trying very hard - but they still sold $1 Billion.  House of cards!

Fri, 11/07/2014 - 15:40 | 5424746 Old_Dog
Old_Dog's picture

And may also be sued for impersonating the whole executive team.

 

Jane Dahl Christensen

Executive Vice President – Physical

Jane Dahl Christensen joined OW Bunker in 2002 as CFO. She has worked as a state-authorized public accountant for Ernst & Young in Denmark and abroad. In September 2010, Jane Dahl Christensen was appointed Executive Vice President - Physical Supply.

 

Management
Jim Pedersen

Chief Executive Officer


Jane Dahl Christensen

Executive Vice President – Physical


Götz Lehsten

Executive Vice President – Reselling


Kent Larsen

Executive Vice President and CFO

Fri, 11/07/2014 - 15:46 | 5424776 Billy Sol Estes
Billy Sol Estes's picture

Can't quite place my finger on it, but I think these people might be related.

Fri, 11/07/2014 - 20:47 | 5425867 mickeyman
mickeyman's picture

Ernst & Young? Again? Are they going to be the next Arthur Anderson?

Fri, 11/07/2014 - 15:50 | 5424794 astoriajoe
astoriajoe's picture

Jiminy Christmas!?

Fri, 11/07/2014 - 19:25 | 5425538 CoolBeans
CoolBeans's picture

It's freaky deaky Dutch  (- reference: Dr Evil)

Fri, 11/07/2014 - 15:33 | 5424713 yogibear
yogibear's picture

LOL, like the movie, "The Producers".

People on the top take the money and run.

Fraud is the current business policy by Wall Street and other markets as well as the Central banks.

Fri, 11/07/2014 - 15:33 | 5424717 taketheredpill
taketheredpill's picture

 

 

Actually would be funny if the Risk Officer flameout was due to hedging a fraudulent position and she ended up suing the company...

 

Fri, 11/07/2014 - 15:35 | 5424720 Raoul_Luke
Raoul_Luke's picture

Winning!

Fri, 11/07/2014 - 15:38 | 5424722 Creepy A. Cracker
Creepy A. Cracker's picture

Someone made a ton of money in a short period of time on that one.

 

HOT TIP(!!!) - I'll be starting OW Creepy A/S if someone is willing to give me $1 billion.  I'll give you paper certificates in return.

Fri, 11/07/2014 - 15:35 | 5424725 ebworthen
ebworthen's picture

Fraud with Morgan Stanley involved?  Who coulda' knowed? 

Bet they sold that crap to retirees and pension funds.

Fri, 11/07/2014 - 15:41 | 5424742 Palladin
Palladin's picture

 

Another great IPO brought to you by our friends at the NYSE.

Put your hands together for a great round of applause.

https://www.youtube.com/watch?v=ayZsYbxU6vM&list=PL8VyXhTFhI7BNQ-xlRJnWj...

and it's gone....

http://www.fabuniversal.com/fab-universal-receives-notice-of-intention-t...

Maybe the symbol they chose (FU) might have been a hint.

Fri, 11/07/2014 - 15:41 | 5424758 Creepy A. Cracker
Creepy A. Cracker's picture

If the company only had the magic power of money printing then all would be well...

Fri, 11/07/2014 - 15:48 | 5424784 Atomizer
Atomizer's picture

IPO gone at 3.9 seconds. 

http://vimeo.com/m/34533332

Fri, 11/07/2014 - 15:49 | 5424786 Dr. Engali
Dr. Engali's picture

Don't blame the underwriters. We all know they are good stewards and  perform the most stringent due diligence before they bring these to market.

Fri, 11/07/2014 - 15:50 | 5424796 Smiddywesson
Smiddywesson's picture

The investors will be just fine, provided of course, that their own risk management was better than their company's risk management.

 

Don't come crying to me if you invest like a greedy ignorant pig.

Fri, 11/07/2014 - 15:57 | 5424824 esum
esum's picture

not sure the FRAUD is ILLEGAL ....... chuckles

Fri, 11/07/2014 - 15:58 | 5424833 tommylicious
tommylicious's picture

Thank you Morgan Stanley!  Well done!

Fri, 11/07/2014 - 16:00 | 5424843 Bryan
Bryan's picture

Silly companies.  Don't they know the stock market is not for providing capital to new companies?  How 20th century of them.

Fri, 11/07/2014 - 16:13 | 5424902 Laughinggrizzley
Laughinggrizzley's picture

Flash backs of Barings Bank!

Fri, 11/07/2014 - 16:13 | 5424909 SillySalesmanQu...
SillySalesmanQuestion's picture

They were'nt around long enough to even do an initial stock buyback....

Fri, 11/07/2014 - 16:31 | 5424941 Bear
Bear's picture

Do I hear BABA BABA BABA BABA BABA

Fri, 11/07/2014 - 16:33 | 5424951 tarsubil
tarsubil's picture

Dot com bubble, Housing bubble,... Executive fraud bubble?

Fri, 11/07/2014 - 16:34 | 5424963 Dre4dwolf
Dre4dwolf's picture

Well if its all worthless, ill buy all the shares for 1$ if no one wants them, that is 1$ for ALL the shares, not 1$ per share.

 

Or on that note, if you are throwing out any office furnature, where can I pick some up, I could use a filing cabinet or two.

 

Fri, 11/07/2014 - 16:38 | 5424969 orangegeek
orangegeek's picture

Just made my weekend!!!!!!!!!!!!!

Fri, 11/07/2014 - 17:08 | 5425081 AdvancingTime
AdvancingTime's picture

Surprises like this are not just poison to the stock market but reflect economic reality that everyone should be aware of. They are the reason the first goal in achieving financial security is to take steps to insure capital preservation. One thing has become crystal clear over the last few decades and that is the economic landscape is constantly changing this means we really are no safer today than in the past.

Remember one day you can be a hero and the next day a goat. One of my largest reasons for concern is I feel that many of the numbers being presented to us do not make rational sense, the "numbers don't work." The article below delves into how all of us will be  vulnerable if the current financial system breaks down and has to be rebooted or restarted under new or drastically different set of rules.

http://brucewilds.blogspot.com/2014/11/capital-preservation-is-job-one.html

Fri, 11/07/2014 - 17:50 | 5425235 Budd aka Sidewinder
Budd aka Sidewinder's picture
“The stock market depends deeply on the relationship of trust between investors and companies.” Ahhhhhhahahahahahahahahahahahahahahahahaha
Fri, 11/07/2014 - 17:57 | 5425257 SAT 800
SAT 800's picture

Yeah, that's the kind of news anouncement that you see just before "unbreakable" stock markets, that have a "new permanent level of high prices"; crash.  There are other rustlings in the underbrush.

Fri, 11/07/2014 - 17:58 | 5425262 U4 eee aaa
U4 eee aaa's picture

"Surprises like this are poison to the stock market, and this is one of the big surprises,"

.....'cept it's not a surprise

Fri, 11/07/2014 - 18:06 | 5425291 SAT 800
SAT 800's picture

Morgan Stanley; the main new york office was the enabler and co-conspirator for Madoff. 

Fri, 11/07/2014 - 20:28 | 5425790 WTFUD
WTFUD's picture

See wha' i'm talking 'bout Herr Fuhrer?

Sat, 11/08/2014 - 11:57 | 5427126 Dragon HAwk
Dragon HAwk's picture

Significant risk management loss..   i think he means Freeking Crooks....

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