Any ideas What’s going to happen to HOS. There stock now traded as HOSS. 17 cents a share. Any chance of mergers??
I think L&M Botruc is talking with them about a buyout. They will all be painted Cheramie Botruc green.
So sad. Wished Todd never jumped on the band wagon building boats blindly without any contracts or oil field certainty. Big Gamble
It could be argued that his major mistake was taking his company public in the first place. With the generous credit markets in the last 2 decades he could have grown his company equally fast with money from venture capitalists & big lenders without screwing over small stock investors & employees who were given shares in the form of bonuses (If they still do that)? Perhaps if he had only a few big investors to answer to & not hundred of thousands small unnamed ones he would have been more careful? But any investor who has ever read half a book on the subject of investing should have dumped HOS years ago. Only those who couldn’t legally sell & the completely gullible still own shares of HOS. So sad indeed.
It’s all on West Texas’ cheap Permian. Who coulda figgered?
Believe that was ole Fraqrat’s favorite stock pick…hope he didn’t bet the farm on it.
The goods news is owners of HOS stock will have a recorded lose in 2020 to pay less in any taxes they might owe from profits from other investments.
The bad news is they’ll probably lose +91% of the cash value of whatever they hold in HOSS now. Meaning if you bought HOSS right now at 9 cents a share you could expect to lose 91% before April 1st. If you bought at $0.60 or $3.00 your lose would be a lot bigger than 91%.
Seeking Alpha had this to say about Todd Hornbeck:
“Kudos to Todd Hornbeck for not taking the easy way out a couple of quarters ago already and instead trying to preserve value for equityholders by a series of moves to kick the can further down the road.”
Obviously at first I thought how good for Todd Hornbeck. Then it dawned on me any investors who had any financial sense or any knowledge of this company sold out a few quarters ago. So all Todd Hornbeck did was prolong the likely inevitable so only the clueless & complete risk takers are left holding the empty bag. He helped the smart investors & those who knew the shares were going to disappear. Way to go Mr. Hornbeck!
Personally I have never understood why anyone would invest in an OSV company. They rise and fall with the price of oil. Anyone can get into the business so their is no economic moat. Why not just buy stock in the oil companies? No major oil company has gone bankrupt in recent times.
Higher operating leverage in an OSV company. You could say the oil majors are like beta. More stable and predictable with the price of oil and other factors. In terms of returns, you could easily generate higher IRR from an OSV company under favorable conditions. OSV companies are a speculative investment, while oil majors are more fixed income in a way. Unfortunately leverage and high fixed costs work in both directions, generating great returns in good times, and bleeding cash in bad times (what’s happening now). All of the OSV companies made huge CapEx when they thought the price of oil would remain high, and it made great business sense at the time.
The OSV companies are always over leveraged and pay their executive WAY too much. They have been nothing but get rich scams for the owners, been that way for 40 years I know of. A stockholder has to know that investing in a OSV company or any drilling contractor is not a long term investment. They also need to ignore pretty much anything the CEO says.They live on borrowed money, pay themselves stupid amounts of money and then when things slow down the bond holders get a hair cut and the stock holders get 0. All that said, I made money from drilling companies stock years ago but wouldn’t invest a penny with them now. Shorting RIG about the same time as the Horizon disaster made my retirement.
Each investor has their own strategies for investing but I’m with you, too volatile with narrow moats. P/E, if there’s any earnings, should be low or in the negative for OSV companies.
I knew a lot of people who used to work for HOS. One captain described a bonus program that they had in the mid 2000’s as hostage pay. I don’t remember exactly how he described it but he said the company would give him a bonus every so often in the form of non-tradable, non voting stock & he couldn’t sell it for a few years. If he quit, he lost the stock that hadn’t matured. If that is true & if they still do that then HOS’s predicament sucks even more for the employees.
Non trade-able non voting stock that you have to hold until years down the road? That’s not even hostage pay that is a evaporating pig in a poke. I would have told them to keep that “bonus” and give me the cash they think that pig in a poke is worth.
I remember when they came to Ft. Schuyler while the market was hot and they needed people. Very smug and all the cadets that interned there thought they were hot shit. Now they pay the worst in the gulf and are about to go under. How things change.
That was my understanding at the time. Hopefully someone with first hand experience with HOS in the early/mid-2000’s will chime in & say I’m full of shit or straighten out my vague memory of what was told to me. But regardless if they are employees or not, anyone holding HOSS now will be getting the shaft so a new HOS can be created. Good luck to anyone who is willing to trust their investment money with Hornbeck on a 2nd or 3rd go around.
Thought all the boat companies did that. ECO definitely did it as well.
I worked for Hornbeck back then. They would give a yearly stock bonus that was I believe 7.5% of your salary that took three years to vest. Once vested you could do whatever you wanted with it. So each year that set of stock took three years to vest. Once you made it to the third year of the first bonus you could cash it out yearly as each year the next year would vest. They also had a deal where you could buy stock at a 15% discount out of your check that immediately vested. Both were good deals while they lasted and the stock was high. Luckily I was with the tug fleet and when we were bought out everything I had automatically vested and I got out of it all before the downturn…
Everyone at ECO drank the"ECO doesn’t do layoffs" Koolaid. Even the office personnel like their legal team.
If that was the case the stock price would have dropped quarters ago. Stock price isn’t affected by Joe Schmoe investor.
The stock price was falling quarters ago! It’s down 93% from last year. It’s been nose diving for over a few years, giving the smart ones time to get out.
2015 a Rep from Otto Candies was at USMMA recruiting. He said they had a no layoff policy. Offering decent wages for green mates. My son called and asked me about that. My advice to him was check other opportunities, Oil patch was in a downward spiral and told him it runs in cycles and there are no guaranties,regardless what the recruiter is saying to a bunch of wide eyed hopeful candidates.
. Now is not the time. He did not take the job, you all in the know , I gave him good advice. He is doing quite well on his own right at his present job.