Why did the stock tank after earnings? Is this the Kubasik effect or the new CFO or both?
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SMS did not perform even with the “superior culture” intruder by Mehta. SMS is underperforming and will continue to try financial tricks to meet its targets. Expect more leadership changes there! Maybe they will appoint an intern as a sector president this fall. They will appoint anyone as a sector president! My advice to SMS employees — kiss the ring and try and get that sector president gig. You don’t need any experience for that
Typically the DoW awards favorable grants to defense contractors doing capex expansion for their benefit (a $200M grant for initial missile expansion a few years ago), not predatory loans. The DoW and Defense contractors have a symbiotic relationship in trying to help each other. Currently L3harris has a duopoly in rocket engine production and should achieve much higher margins on the open market with the huge demand. Nevertheless, they are offering the DoW 14-16% operating margin (CEO announced) at the DoW's request for Patriot and Thaad missile rockets, even though the analysts are expecting higher. Meanwhile, the DoW offers up this predatory $1B convertible that is like a "10% short-term" loan, which is more equity dilution than any loan the company could have taken for capex expansion without equity dilution.
The point is why couldn't L3harris negotiate better terms on a major acquisition risk they took years ago buying AJRD. Why is the favorable treatment only from L3harris to the DoW and not the other way around. Who in the government came up with the terms of this predatory convertible that looks more like deals cut by a Cantor Fitzgerald hedge fund then the DoW.
Don't forget the free warrants as well. On paper, it's close to a 10% short term loan. The Pentagon did place guaranteed orders though. Paying themselves basically with taxpayers dollars.
Yikes, I now see the DoW investment looks more like a predatory loan. New 10-Q has some info, but 7% interest and 20% discount is pretty wild.
7% dividend of $70M/yr of additional equity dilution above the $1.2B DoW taking 20% free and 3% warrants. The DoW decided on predatory financing. Who knew the details that were signed away? 4 months later we learn they pay 7% additional equity dividend a year in AXYV! Everything is buried with no explanation in the 10Q not easily discovered. How about the $1.422B payoff LHX has to give the DoW if they fail to give them $200M equity for free.
The people who got in and out quickly on the recent SpaceX IPO probably su-ked all the oxygen out of the room. I wonder if they also got feedback that their plan to retain controlling interest in the new company turned big investors off. The Kube makes the kall!!!
@es 😂 it's good to want things. It builds character.
@fx If you have the normal Fidelity 401k you can call and it have it immediately sold the day of payroll post and purchase one of the other Fidelity funds.
Thank God I didn't invest my retirement money in company stock. As part of the bargaining unit, we got a cash match in our 401K instead of stock. My pension comes from a prepaid annuity from a third party separate from the company.
Retired recently and thankful to completely break away from this dump of a company.
Axyv: we want 700 per share
INVESTORS: Say less, best we can give you is 250 and some credit for 2 nights in Vegas. Chum Lee also needs to get fed and we need to store the axyv somewhere. That costs alot
Axyv: sc--w you guys, I know what I got!
The IPO on the Fed invested rocket spin-off was delayed. So the market corrected because more time makes for more risk of change in priorities for the Federal government.
@bh better try instead of diversifying, get rid of all of it. Time to take a ‘dump’ ha ha
What a bunch of cr-p. These people are self serving grifters who spend countless hours trying to hustle more “bonuses” from the company.
If you still own stock in this company I strongly advise you to diversify.
"The market conditions do not reflect the value we’re building"
Translation: Not enough hype to pump the IPO
"We’ve got to do what’s right for our shareholders … "
Translation: Same as always
"and that’s to stand down, focus on the business, and wait for the market to recover"
Translation: We don't know what else to do. Markets won't be this hyped up for a long time, but whatever.