I had purchased NADL betting that a deal with Russia’s Rosneft would come to fruition in the fourth quarter. However, oil prices and sanctions have clearly left Rosneft thinking it best to delay the transaction. Leaving me holding a very rough (albeit technically competent) operation.
NADL is no good on its own. Deep sea extraction in this environment is terrible, given the price of oil. The company itself is debt burdened. The only thing that made NADL sweet was Rosneft buying up such a large part of the company with assets and cash – the buying price was something akin to $9 a share, or more.
I bought NADL because the deal was sweet and would have completely changed the calculus for holding investors.
I bought the deal. Not promises of the deal.
I’m not waiting around for another eight months praying the Russians make good on their world. The word of a Russian is worth dick to me.
15% loss on a full position cost me 1.5% net. It will get rolled into tax season. Otherwise, my positions are doing well. We’ll see if they keep it up.
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