Quote:
Originally Posted by bware
Are you still trading it? Is anyone still holding it? Haven't read enough to know if this is a turnaround or just delaying the inevitable failure.
its actually super easy to analyze in a vacuum. HOS equity as an instrument is essentially a long dated option on oil. Either HOS equity is worthless in a couple years or it's worth multiples of where it is today. You just have to assign the upside price possible and the likelihood to figure out if it's worth it today.
What changed with the facility is that previously you had an option to essentially mid 2019 which is about 2 years. With this new facility I think you basically add a year to that option or increase the life by 50%. Same kind of math here as you essentially have a call option.
We were previously only in the debt but initiated a small kicker position at sub $2 for this "option" value.