Shorting Madoff's Stocks
by: Stockerblog January 12, 2009 | about stocks: HYB / TOH
Now that we know that the government is liquidating Bernard L. Madoff Investment Securities, it may mean that there will be some downward pressure on the stocks that Madoff's firm owns. Does this mean that there could be some short squeeze plays here? This is assuming that it still actually owns the stocks that the company reported to the SEC as of September 30, 2008.
For example, his company reportedly owns over 2 million shares of the New America High Income Fund Inc. (HYB), a junk bond closed end fund. This amounts to about 1.8% of the shares outstanding.
Hicks Acquisition Co. I Inc. (TOH) is another Madoff stock, of which his company reportedly owns over 500,000 shares or about three quarters of a percent of all the company's outstanding shares. It is interesting to note that according to Yahoo Finance, Hicks is a Dallas, Texas based company, founded in 2007, with no significant operations. Yet the company has a market cap of almost half a billion dollars.
For an Excel database of some of the significant shareholdings of Bernie Madoff, which can be downloaded and sorted, go to WallStreetNewsNetwork.com.
http://seekingalpha.com/article/114336-shorting-madoff-s-stocksSources tell Sirius Speedway that Gillett is heavily leveraged from the original Evernham buyout, as well as from a number of automobile dealerships he purchased earlier this year. He reportedly faces a major payment on his Liverpool Football Club, which plays in the English Premier League, as well. A deal that would have merged GEM with Bill Davis Racing fell by the wayside a few weeks ago, reportedly after Gillett was unable to obtain financing to complete the transaction.
Gillett has recently been involved in negotiations to merge GEM with Petty Enterprises. Sirius Speedway reported two weeks ago that the merger had stalled, and while that report was immediately denied by a GEM spokesman, Sadler’s release appears to indicate that the deal is indeed in jeopardy.
http://www.sirius-speedway.com/2008/12/dinger-in-sadler-out-at-gillett.htmlI think the piece below was produced the day before the non-compliance notice deadline of 12/3
10-K: HICKS ACQUISITION CO I INC.
Last update: 6:07 a.m. EDT March 11, 2009
(EDGAR Online via COMTEX) -- ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Overview We are a blank check company formed for the purpose of acquiring, or acquiring control of, through a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination one or more businesses or assets. Our management team is engaged in the private equity business and evaluates various acquisition opportunities from time to time in connection with their ordinary course of business. Our efforts in identifying prospective target businesses will not be limited to a particular industry, but we will not complete a business combination with any entity engaged in the energy industry as its principal business or whose principal business operations are conducted outside of the United States or Canada. We intend to effect our initial business combination using cash from the proceeds of our initial public offering, our capital stock, debt or a combination of cash, stock and debt. The issuance of additional shares of our stock in a business combination: may significantly dilute the equity interest of our investors;
may subordinate the rights of holders of common stock if preferred stock is issued with rights senior to those afforded our common stock;
could cause a change in control if a substantial number of shares of our common stock is issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers and directors;
may have the effect of delaying or preventing a change of control of us by diluting the stock ownership or voting rights or a person seeking to obtain control of our company; and
may adversely affect prevailing market prices for our common stock and/or warrants.
Similarly, if we issue debt securities, it could result in:
acceleration of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant;
our immediate payment of all principal and accrued interest, if any, if the debt security is payable on demand; and
our inability to obtain necessary additional financing if the debt security contains covenants restricting our ability to obtain such financing while the debt security is outstanding.
As indicated in the accompanying audited financial statements, at December 31, 2008, we had approximately $539.8 million in cash held in trust, which includes accrued interest of approximately $388,000. We intend to use substantially all of the net proceeds of our initial public offering, including the funds held in the trust account (excluding deferred underwriting commissions), to acquire a target business. Results of Operations and Known Trends or Future Events Through December 31, 2008, our efforts have been limited to organizational activities, activities relating to our initial public offering, activities relating to identifying and evaluating prospective acquisition candidates, and activities relating to general corporate matters; we have not generated any revenues, other than interest income earned on the proceeds of our initial public offering. As of December 31, 2008, approximately $540.1 million was held in the trust account (including $17.4 million of deferred underwriting commissions, $7.0 million from the sale of warrants to the initial stockholders and approximately $388,000 in accrued interest) and we had cash outside of trust of approximately $819,000
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and approximately $899,000 in accounts payable and accrued expenses. Up to $6.6 million of interest on the trust proceeds may be released to us for our activities in connection with identifying and conducting due diligence of a suitable business combination, and for general corporate matters. Through December 31, 2008, we had withdrawn $5.0 million from interest earned on the trust proceeds for working capital requirements. Other than the deferred underwriting commissions, no amounts are payable to the underwriter in the event of a business combination.
$1.2 million of expenses in legal, accounting and filing fees relating to our SEC reporting obligations, general corporate matters, and miscellaneous expenses.
We believe we will have sufficient available funds outside of the trust account to operate through September 28, 2009. However, we cannot assure you this will be the case. Over this time period, we currently anticipate incurring expenses for the following purposes:
legal and accounting fees relating to our SEC reporting obligations and general corporate matters;
structuring and negotiating a business combination, including the making of a down payment or the payment of exclusivity or similar fees and expenses; and
other miscellaneous expenses.
As indicated in the accompanying audited financial statements, at December 31, 2008, we had out of trust cash of approximately $819,000 and approximately $899,000 in accounts payable and accrued expenses. We expect to incur significant costs in pursuit of our acquisition plans. There is no assurance that our plans to consummate a business combination will be successful or successful within the target business acquisition period. These factors, among others, raise substantial doubt about our ability to continue operations as a going concern. The accompanying financial statements do not include any adjustments that may result from the outcome of this uncertainty. Off Balance Sheet Requirements
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Critical Accounting Policies
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141R will be applied prospectively to business combinations with an acquisition date on or after the effective date. As a result of the adoption of SFAS 141R, we expect that approximately $3.5 million will be expensed in our financial statements on January 1, 2009 due to the deferred acquisition costs related to the Graham Transaction. SFAS 141R no longer allows deferral of these costs.
Mar 11, 2009
http://www.marketwatch.com/news/story/10-k-hicks-acquisition-co-inc/story.aspx?guid={4E6F2F51-7CB9-440A-86E4-CFE414F33C5E}&dist=msr_2In the event that Hicks Acquisition doesn't find an appropriate company to acquire within 24 months, it will dissolve and return $9.75 for each $10 unit purchased. Each unit bought includes a warrant to buy another share of the company for $7.50.
http://www.dallasnews.com/sharedcontent/dws/bus/stories/DN-hicks_04bus.ART.State.Edition1.35ad83c.html