Lonmin - What do people think

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Dr Who

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Hi All

I have been watching Lonmin with much fascination, Its share price is now at R5.13, what do you think the future holds for this once giant company?


As a speculative bet I bought a few shares at R5 its crazy to see how low it is.
 
Dr Who said:
Hi All

I have been watching Lonmin with much fascination, Its share price is now at R5.13, what do you think the future holds for this once giant company?


As a speculative bet I bought a few shares at R5 its crazy to see how low it is.
Click to expand...

I have 100 shares that I paid R50 each for.

I wouldn't buy more, they'll most likely be bankrupt within 2 years.
 
Well I now own 700 shares in this at R5.50 weighted cost. I will stay in until about R20 of so lets see if I can make some quick money. I saw a stat that their NAV is R67 which is scary.
 
Any finance experts have a clue on what the future holds?
 
I bought at R8.98 (not real shares) and it has now -51.54% @ R4.35 and still sliding. Not looking good at all. I monitor periodically throughout the day just praying for some sort of peak.
 
My question is more along the following lines:

1) At its current Market Cap its half the sale price of 1 poor performing mine shaft which was sold by Amplats.
2) Its sliding lower but at the end of the day it is the 3rd biggest producer with assets of some value.
3) Its commodities price are at a 7 year low down 40% and they are unprofitable ( for good reason ).
4) They need to refinance their debt but surely I cant see them getting liquidated they will just sign a deal or sell off an asset to do so.

So the quest begs; is this the speculative bet of a lifetime as you can buy now at under R5 and hold until R20 which is still grossly lower than NAV but you would have 400% return. This slide must be based on fear rather than fact..... I own 700 shares at R5.50. Maybe I should up this even more at the new low price...
 
It should have rang a bell when Glencore give away its stake few months back. Its likely the mine share price will be low for quite sometime
But lowest it can go i suspect is R2.50 not more than that. With long term view i would buy and sell at R20+ price.
 
pratlou said:
It should have rang a bell when Glencore give away its stake few months back. Its likely the mine share price will be low for quite sometime
But lowest it can go i suspect is R2.50 not more than that. With long term view i would buy and sell at R20+ price.
Click to expand...

The lowest a share can go is zero...ask those who bought SA Coal Mining a few years ago.
And those who bought ABIL that had a NAV of >R10
 
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I went for an interview about a year ago with Lonmin. They presented stock options as a 'perk' of the job, I wanted the job so didn't say what I thought. Seems as if I was right.

Good thing I asked for too much.
 
pratlou said:
It should have rang a bell when Glencore give away its stake few months back. Its likely the mine share price will be low for quite sometime
But lowest it can go i suspect is R2.50 not more than that. With long term view i would buy and sell at R20+ price.
Click to expand...

The JSE doesn't do negative prices.
The actual value of Lonmin could be minus R20 per share for all we know.
In other words, they are in debt.

They are trying to raise capital to stay in business.
 
Pegasus said:
The JSE doesn't do negative prices.
The actual value of Lonmin could be minus R20 per share for all we know.
In other words, they are in debt.

They are trying to raise capital to stay in business.
Click to expand...
Nope. Shares are equity instruments & thus can't be negative. Or rather if they are then the company should legally have been liquidated already.
 
Further update: With no end in sight I am now down 22% from a cost per share of R5.50. Everything in me is screaming idiot but yet I still have this yearning to buy more at less then R4 per share.
 
Dr Who said:
Further update: With no end in sight I am now down 22% from a cost per share of R5.50. Everything in me is screaming idiot but yet I still have this yearning to buy more at less then R4 per share.
Click to expand...

Martingaling... Don't do it, son :)
 
Dr Who said:
Further update: With no end in sight I am now down 22% from a cost per share of R5.50. Everything in me is screaming idiot but yet I still have this yearning to buy more at less then R4 per share.
Click to expand...

How deep are you in?
You taking a punt it will recover well in future?
 
I am not deep at all, and the 1000 odd shares that I own are from Money which I would have probably spend on dinners out or Booze. I see this as the Black and red of the stock market. I also do not believe they will recover to a good place but do believe that they should get back to the R15/R20 per share which is probably a extremely cheap price for all that real value in the ground.
 
Another major mining stock facing woes similar to Lonmin's.

CP_aAgRUcAEUHmm.png
 
I think Glencore might be worth buying, they're unlikely to go into liquidation which I think is likely for Lonmin. Lonmin will not survive a prolonged period of low commodity prices.
 
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