Member Info for Kabaa

Quite a few stocks like this are getting smashed pretty badly. PDL, mtro etc.

Good to see them bounce back up though.

Someone keeps saying that most stocks drop 90% never recover. That is nonsense - The amount of stocks like this i've seen multibag (or go up 2-7 times from the low) after dropping 90% is quite a few this year!

Why are they getting smashed down so much though??

This will eventually turn and do a 3digit% in a very short time period...

Poker, I've seen so many people like you on forums and every single time, they have sold out at a loss. Most want the company to either fail or go down so they can buy back in cheaper or so they don't feel so insecure about their loss.

Do you honestly Think lab grown diamonds are going to have any effect on PDL whatsoever in the next 20 years?

You are obviously cherry picking anything that suggests pdl will go down which on the grand scale of things are drop a in a bucket.

Millenials not buying diamonds lol. The amount of countries around the world that are moving from socialist policies to more free economies and creating a middle class who can afford diamonds, dwarfs what a bunch of millenial hipsters in the West are going to do.

Asia, Africa, India, Eastern Europe, South America are all moving away from these ideologies and growing at a huge rate because of It. These people will want diamonds. Population growth alone dwarfs any of these problems you speak of. That is why diamond prices are set to surge from 2021-2050. Demand will not only surge but supply will not be able to meet It, hence large price increases.

I could list why all of your points are either irrelevant or just complete nonsense, but you are just here because you want people to sell their shares.

I am heartily laughing out loud at pokerchips posts.
There is always one of these people at the low of every single oversold stock I've ever seen that proceeds to multibag and I've seen many.
Screaming completely irrelevant points in fear.
I'm sure he could list another hundred if you asked him.
Just remember, the stock market is there to take cheap shares off people like this lol.

Hi Dusterman

The bonds will need to be paid off in 2022 yes.

But what usually happens is either a new lender comes in and offers to restructure the debt or the existing bondholders will offer to invest in longer term bonds (rollover) with petra in exchange for paying the 2022 ones off. (E.g. they offer a further 2027 bond on the condition they use this money to pay off the 2022 bond, effectively just extending the duration)

It is in their interest to be supportive to a company like pdl because
1. They do not want a bad name for being nasty creditors who just kill off a company for a small covenant breach (If there is one next year) - it puts off other borrowing from them.
2. They're getting their money + interest + principal repayments so it would be idiotic to close pdl down, they're not in the business of diamonds, they're in the business of finance.

It is not much different from getting a 5 year fixed mortgage. You dont have to pay the whole thing off in 5 years, you either renogiate or go elsewhere. Remember pdl is the 3rd largest diamond resource in the world that was creditworthy enough with several lenders for hundreds of million. It will continue to be so...

The market imo is being extremely cautious here and the chances of pdl sorting this problem out in the next 3 years imo is close to 100%. The stock is being priced almost as if there will be a debt for equity swap or be put in admin. (Again this would have to be at least 10p anyway due to the nominal share value) and admin would be absurd for everyone involved.

I could have missed something of course but quite often markets price things absurdly cheap for a while with completely irrational fear and then rerate to a more sensible level I.e. 30-50p.

The company is shocked by the share price obviously as you can see the rns on 30th July and duffys 21p buy in May.
But the market can go insanely cheap sometimes then 5-10bag very quickly and I believe this will be one of those occasions...

This will have the mother of all rallies some point soon.

It's selling off as if it's about to go bust imminently. It isn't. It throws off free cash and has wide margins and has actually just turned a corner if you look into the account.

This is not a case where creditors are quick to come and close the company down when they are getting paid down, with an attractive interest rate to boot.

I imagine PDL will be concerned about the share price and will be discussing closely with creditors to restructure their debt along with covenants, longer term. Any news of this and the market will open up in the teens/twenties at 8am one morning.

The other example of indebted companies people attempt to compare this to are basket cases that constantly lose money and have terrible cash flow positions in a failing industry. This doesn't

This imo is a blood bath on the share price and nothing else and will soon be over with bright skies ahead. People selling here in weeks/months to come will regret it badly.

Of course I could be wrong and it could trade down at a lower market cap than the stone they just found on the 23rd, but I feel that is quite unlikely...

I've asked this before but who is Baron????

I'm not too bothered what the share price does day to day. Duffy put in £52,000 at 21p which is 200% higher. You can bet he hasn't just waved goodbye to 50 grand and it will be at least back up there within a few months latest.

That is a very good point. The majors could refinance the debt and add about 100m onto the FCF per year, just saving on the interest payments!

This is why the share price is so bananas! It does not make any sense to be down here.

Any whiff of news of debt restructering and this will be back above 40p imo.

My guess for this up move today is the fixed income conference yesterday went good.

They probably had a lot of interest at restructuring their debt, especially when they're paying 7.5% + making a huge amount of free cash on top.
And interest rates being so low it's easy money to lend the 3rd largest diamimond producer in the world hundreds of millions and take an easy 6% spread off it.

Dusterman. Well north of a quid.

Diamond prices are due to increase towards 2030 and 2050.
Once debt out of the way and restructured, ebitda will get a much higher ratio

Shorts have got to buy back at one point.

What really is more likely in say October?
9.5p or 5.5p?
15p or 0p?
12p or 3p?

I mean come on, the risk reward here is ridiculous for them to keep selling...they may as well start buying back...

Yes Oiltap, not only is the debt serviceable, we are on $70m freecash and projected to be similar without diamond finds as earlier this week.

When you are in this much debt, it is definitely not of any interest to the creditors to close you down when you are generating that much free cash after servicing the debt and interest and are fully able to pay it off. It is of no interest to do a d/e either.

If pdl start making an actual loss (in cash) per year, then I will be very worried and would be selling at these levels. But this is just absurd and when things like brexit are out of the way, there will be a surge in overly sold out stocks like this.

Good post colonel but just to add, this is an extremely conservative forecast.
They're forecasting flat production, remember they were targeting 5m carats per year not so long ago. A stronger rand than now and continued subdued diamond prices.

A few things go in the right direction (and looking at this blue diamond find yesterday they can easily go) then this share will be back over a quid in a flash.
This is not some tiny stock that deserves a p/e of 5 or 7, it's one of the biggest diamond mines on the planet.
It won't get put in admin easily imo.

Patience.

Have confidence in what you've bought for the value play.
It will go up eventually and probably very significantly.
Stocks are always overbought and oversold.

Sometimes it takes weeks, months and even years to come back to their real value.

Selling at anything below 20-25p in this is giving your money away imo.

They have specifically told us they are not considering raising equity for the debt 5 weeks ago. Look at the rns, not these flybynights

I am not sure telegraphist, but when we have been aggressively sold off from £1.80 to 8p and people complain that the debt is too high and now we find a diamond that could add 50% to the Free cash per year (assuming we may find a similar one each year), it completely changes the game here.
It could be the catalyst that finally reverses this deadly downtrend on the chart.
One of these diamonds found per year could absolutley 1. Change the game in how easy that debt will melt away, 2. Make the whole company look far more attractive as a T/O for bigger players.

This is an extremely oversold stock anyway but to find a diamond of that value in the ground today, on top, could put a real bull in the market over the next few weeks/months.

I think many long suffereing shareholders deserve a decent turn in their luck here. GLA holders....

''Type IIb diamonds make up about 0.1% of all natural diamonds, making them one of the rarest natural diamonds and very valuable. In addition to having very low levels of nitrogen impurities comparable to Type IIa diamonds, Type IIb diamonds contain significant boron impurities. ''

A beauty, that should chip away at the debt nicely. A few more of them in the next year please...

Thanks. I've given up on it. Tried to write 3 or 4 messages and all disappeared.
23m is a very good sign basically and suggests seller out and big buyer in the house. Shorts may need to dash for cover on 20m+