So last August HE dropped from 40 to 12 as the scapegoat of $5B liability. Now, in the $4B settlement, HE might be liable only for $1.5B. Doing some dumb math, HE should be worth no less than $30/share. 4 years to pay, with bonds probably being issued, I think we will see some sort of dividends this year already
11 bags return
1 - Told you charts looked like Stock wanted to go up.
2 - my Sep $12.5 calls are up 1100% in less than 10 days.
3 - Maui says - Vendor disqualification is now holding up Maui Fire Report 🤣🙄
HE stock
I think you nailed it. More big boys will make their play 1st.
BlackRock bought 11 million shares last week. Perfect timing--- imagine that.
Others are getting in this week.
NEXT:
The report will come out. (should have come out already)
A few Analysts will upgrade the stock based on the report causing it to spike to 15
August 9th : HE quarterly report - Dividends reinstated (small at first)
MORE analysts will upgrade HE causing
with minimal dividends and upgrades HE will hit 20 in August.
HE stock evaluation
A reasonable price is a PE around 15-18. That puts us around $28. Two other factors if dividend starts again the company pays less taxes thus their net profit goes up. This could justify $35. Inflation and price increases could push $40+ and with so many shorts holding and hoping for bankruptcy maybe a good squeeze in the next year.
So tomorrow Friday 19th they will release if they settle for a $ amount to be paid by HE due to the fires. If they reach an agreement and the settlement os payable we go to the moon, if it is too high , the stock could go to 0 and even need for government bail out. Let's consider HE serves 1.4M residents. If they settle for 1 billion for example, this is terrible terrible news as they can't pay back. Can someone else please share more insight?
I heard a lot of this kind of 'go to zero' talk when PG&E had been sued and was guilty. It's not accurate. They wont be bought by another company or taken over by the state. If guilty you will see a structured settlement that will be assisted by loans guaranteed by the government plus cash and stock placed in a trust for the victims. Look at the law firm they hired to represent them. Yes the stock price will drop but it will recover to a lesser value than $40/share depending on dilution but they haven't been found guilty and have denied responsibility from the very beginning.
HE has a liability insurance policy of 500 million; however, maybe $400 million left.
If HE agrees to less than 400 million, HE is good.
As a prototype of liability, consider
The One ‘Ohana Fund: Contributors to the fund include: Hawaiian Electric Co. ($75M); the state of Hawai‘i ($65M); Kamehameha Schools ($17.5M); Maui County ($10M); Charter/Spectrum ($2.5M); Hawaiian Telcom ($2.5M), and West Maui Land Co. ($2.5M).
Obviously, the implied participation rate from each defendant has changed due to the ATF report. Perhaps, now, Maui County is 75%(?) and wanting to pay less.
Maui left the seen of the fire prematurely; failed to sound the sirens, failed to control the grass...
If county negligence was the primary cause of the fire as appears likely, HE share of a settlement should be far less than $1 billion.
a global agreement requires HE to agree :) The alternative is for the plaintiffs to wait years as 400+ lawsuits go one by one. Even if HE's liability was $1B (it will not), there would be a state backed bond, so the actual cost would be around $50 million/year with $200 million/year in earnings. So, we can argue if the price will go to $40 or less, but it is a no brainer that it will be above the current level, as it is still priced as the scapegoat of the whole thing
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