- Electric car battery maker files for bankruptcy.
A123 Systems Inc. has filed for bankruptcy protection. I doubt that A123 is the world’s only provider of electric car batteries – but the reason that this particular bankruptcy is attracting so much attention is the $249.1 million federal grant it received in 2009.
The company plans to sell all of its automotive assets to Johnson Controls Inc., with all the usual spokesman remarks about “good complement” and “fit” – which is jargon for “we are getting this so cheap.”
The A123 share price dropped to 6 cents:
I can’t help but think that the price is a touch low, as ironic as that sounds. In the bankruptcy filing, the company listed assets of $459.8 million and debt of $376 million. That suggests an equity value of $84 million. The current share price indicates that the market values the residual of the company at $9 million.
Given that the reason for the bankruptcy filing was the company failing to meet its interest payment on $143.8 million, I would think that the real issue here is liquidity, not solvency.
I’m just saying that, if I were looking to punt on penny stocks, I’d put some money into this one.
How I love companies in distress.
- The end of the world.
Link: for Spain, at any rate.
The worst case scenario of Spain’s stress tests, the “only 1% probability of this happening, like, ever”, is looking a lot like the classic black swan that appears so often it could be a renewable food resource.
In July, 9.86% of the Spanish banking systems asset book comprised bad loans. The August numbers are due out later this morning. With all the contraction and the rising bad loan book, analysts are beginning to say “you can’t attach a 1% probability to a scenario that already looks feasible”.
We seem to be edging closer to that bailout…
- Fleeing the scene.
Nike has left Mr Armstrong, citing “seemingly insurmountable evidence” of the doping scandal.
I still maintain that all this issuing around doping is making for bad television. Why not let everyone do it? Then we can watch the Tour de France at blitz speed.
- Five things the Republicans won’t tell you.
Link: just to be fair.
A few weeks ago, I posted a link to the Democrat version. So here’s the Republican one.
That’s all for now.
Have a good day.