Just a quick note that Alpha Natural Resources, once a very good investment, has filed for bankruptcy. Yes, partly due to fracking and cheap natural gas. But, IMHO, much more due to Obama and the EPA and their “war on coal”.
Here is a chart of Alpha Natural Resources showing where they were 5 years ago, near the start of the Obama Reign Of FUD (Fear, Uncertainty, and Doubt – a strategy popularlized by IBM in the ’60s and now well worn by the Democrats, U.N., and Global Fear Mongers pushing “Global Warming” fear – though with less room for doubters in their tent).
Original from: http://stockcharts.com/h-sc/ui
Starts out near $60 a share. Now it’s at about 4 ¢ a share. Now that’s wealth redistribution alright. All the stockholder wealth redistributed to the banks and bond holders.
Here’s the story behind it:
Alpha Natural Resources files for Chapter 11
By Matt Jarzemsky
Published: Aug 3, 2015 12:56 p.m. ET
The ailing U.S. coal industry got another black mark Monday morning, when Alpha Natural Resources Inc. filed for chapter 11 bankruptcy protection.
The Bristol, Va., company filed for chapter 11 protection in U.S. Bankruptcy Court in Richmond, Va., brought down by plummeting coal prices and high debt from its 2011 acquisition of Massey Energy.
The Wall Street Journal reported Sunday that Alpha, with assets of $10.1 billion and liabilities of $7.1 billion, would be entering chapter 11 as part of a plan to cut its debt load, another victim of the severe slump in coal prices that continues to wreak havoc on the industry.
“While a difficult decision, this voluntary Chapter 11 filing is the right strategy at the right time for the future of our business,” said Alpha Chairman and Chief Executive Kevin Crutchfield Monday.
Alpha, one of the largest U.S. coal producers, isn’t entering chapter 11 with a restructuring plan in place, but did say in a filing accompanying its bankruptcy petition that it doesn’t want to immediately sell itself “at a low point in the coal market.” The Wall Street Journal reported Sunday that the company will likely sell some of its best mines or turn them over to creditors and close others during bankruptcy, citing people familiar with the matter.
The buy of Massey no doubt added the debt load that made it hard to just coast through the coal price collapse (due to coal power plant shutdowns and conversion to natural gas). But the night is young… and others without that excuse look quite similar on the charts.
From $32 / share to 18 ¢ in one smooth flow. Thanks Obamanomics!
Coming soon to an industry employing you…
Please note that this is not unique. Alpha N.R. isn’t even the first in the group to actually declare bankruptcy. The whole group (all of our real energy companies, actually) is under strong pressure and government driven threat of destruction. BTU Peabody coal, one of THE largest, is at $1.09 today (so forbidden for many funds to buy as it is under $5 / share) down from $16 a year ago and $70 just four years back. Yup, that Obama quote about coal fired power and “bankrupt” shows he is a man of his word…
Is that the job of Washington D.C.? To destroy wealth? How many pensioners just lost their pension? How many mine workers their jobs? How about other folks? The stock specialist who traded Alpha Natural? The middleman who bought and sold their coal? The trains and drivers who hauled it? The powerplant workers who used it? Just how many were taken out back and economically shot in the head by an egotistical President who was just so sure he was right and they were wrong?
Stupidity knows no bounds… And Ms. Clinton want’s to do that on steroids, per her Global Warming speech.
More on Arch, and the question of “are they next?”, here:
Arch Coal – Additional Thoughts On Debt Exchange, Bankruptcy, And Coal Prices
Aug. 3, 2015 8:31 AM ET | 10 comments | About: Arch Coal Inc (ACI)
Debt exchange is essential for Arch Coal.
The company’s earlier contracted coal will mitigate the impact of current coal prices.
Arch Coal won’t proceed with an Alpha Natural Resources-like early bankruptcy filing.
In my view, conference calls are even more important than earnings reports for companies in Arch Coal’s (NYSE:ACI) situation. The tension around the company increased after the release of the Bloomberg report, which stated that fellow miner Alpha Natural Resources (NYSE:ANR) could file for bankruptcy as soon as this Monday. In this light, it was very interesting to hear what Arch Coal’s executives have to say about the future of their company, whose stock is trading for cents after being above $3 a year earlier.
Another item of particular interest is whether bankruptcies of miners like Walter Energy (NYSE:WLT) and Alpha Natural Resources will lead to the reduction of coal supply. The above mentioned report by Bloomberg suggests that the bankruptcy plan included shutting mines. Arch Coal’s CEO stated that he thought supply from the companies that emerge from bankruptcy would be a lot lower. This topic has been a source of major debate recently. The perceived catastrophic scenario implies that miners emerge from bankruptcy debt-free, don’t cut production, and pressure the remaining players to file for bankruptcy protection in order to gain the same competitive advantage.
Note the reference to Walter Energy, also bankrupt. Their ticker is now WLTGQ as they have been moved to the Pink Sheets and given the “Q” ending indicating bankruptcy filed.
That “Marketwatch” article also mentions Walter:
The slump has a number of coal companies at risk. Walter Energy Inc. filed for bankruptcy protection last month with a plan to hand control of the company to senior creditors, after chapter 11 filings by Patriot Coal Corp. and Xinergy Ltd. earlier this year. Arch Coal Inc., meanwhile, is working with bankers and lawyers who specialize in helping struggling companies, The Wall Street Journal has reported, and is facing lender pushback on a proposed debt-for-debt exchange meant to reduce its borrowings and interest costs.
Alpha has posted four straight annual losses and disclosed in May that a Wyoming regulator had notified the company it no longer qualified for a “self-bonding” program that had freed the company from buying insurance to cover future mine cleanup costs. Given the financial burden, the company opted to file for bankruptcy rather than repaying a convertible bond due at the start of this month, despite having $476.3 million in cash as of March 31.
Which adds Patriot Coal and Xinergy to the list.
I note in passing that Obama was 100% in favor of a “bail out” of General Motors to preserve that union’s pensions, but I guess he doesn’t like conservative miners as much as liberals from Detroit. That, too, is part of the problem with letting government pick favorites. ALL are supposed to be treated equally under the law, but with bailouts, some are more equal than others.
Any Republican with 1/2 a brain ought to be running clips about Obama and the Democrats war on coal, and madam Hillary’s plan to continue it, throught out Coal Country and into the industrial heartland. Then just ask “Is your industry next?”