Friday, June 20, 2014

More Kior questions

Granted, this article is posted on Seeking Alpha.  The finance website is not exactly the Wall Street Journal.  However, this  May 28 post about Kior raises some interesting questions.


 KiOR (KIOR) stock ripped up a whopping 20% on Friday after news came out that billionaire investor Vinod Khosla decided to continue with another $5 million investment tranche in the company. It went as high as $0.60 per share, but has already given most of that back. Stock investors need to realize - Khosla ain't buying stock! He's buying secured senior bonds. Secured means that they are backed up with the hard assets of the company. Therefore, one can make the argument that KiOR is effectively going through bankruptcy right now! Khosla is prematurely buying the assets through secured bonds before the official bankruptcy proceedings begin....

In the 10-Q, the company reported that it had $3.3 million in cash on April 30th. That was after it had received the first $5 million tranche from Khosla. So Khosla is only committing $20 million more. That makes a shortfall of: $54.8M-$3.3M-$20M = $30.1M. Where is KIOR going to get that extra $30.1M to continue operations?

Khosla will finish investing his $25 million total investment by August. KiOR is flat broke and is just living off of Khosla's $5 million every month. I calculated in my last article that KiOR burned $5.9M in April, so they are going to have to penny pinch to make the $5M per month last. Once August comes around, if Khosla stops investing, which he probably will, KiOR will have literally no money left to continue doing anything other than filing for bankruptcy.

Read the comments as a Kior representative tries to trash the analysis. Here is an interesting scenario.  Mississippi has a $75 million note and the facility in Columbus is the collateral.  Suppose the company files bankruptcy.  Do Mr. Khosla's senior secured bonds affect the lien position? Honest and serious question.    The share price for Kior is $0.38. The market cap is $42 million.

9 comments:

Pugnacious said...

Do Mr. Khosla's senior secured bonds affect the lien position? Honest and serious question.

A question Commercial-Dispatch editor/owner/publisher Birney Imes should be asking LINkMEISTER Max Higgins in an editorial.

Will Birney award Max a crown of roses, or a crown of thorns? That's about as close he's ever come to finger-pointing;unless it's some scheme to get rid of the State flag or rename the Caledonia Confererates ballteam. PFFT!!!

Anonymous said...

Rock on Pug. Vino! Table three.

Pugnacious said...

Bill Gates has a large financial investment in KIOR. Surely, his legal team has his assets covered with some sort of legal shenanigans?

Anonymous said...

To shore up my theory that Pug is either Kingfish or is otherwise 'close' to the Fish, I offer the observation that KF has never, ever, not once contradicted, slammed, disagreed with or mocked Pug. Compare that with the way he used to treat Ole ShadowFart.

Joseph said...

The only way KiOR has stayed afloat thus far has been because of Khosla's periodic cash infusions. I wonder if there is any way for the state to call this bill due?

State officials (including Governor Barbour) practiced a little too much willing suspension of disbelief in this case. I believe they saw potential jobs, and Haley looked at it as a green-energy feather in his cap while he considered a 2012 presidential run. Unfortunately, it seems all of the "green" economic development projects undertaken under Barbour are, at the very least, facing extreme difficulty.

Kingfish said...

Nice try. Have no idea who Pug is. He knows a damn lot more about Columbus area than I ever cared to know.

Its real simple. Pug doesn't attack me or this site, doesn't make up stories or levy false accusations. Shadowfax does. He doesn't act like a 12 year old which Shadowfax is prone to do from time to time. Shadowfax was prone to throw tantrums as he thought this site was his personal toilet.

Oddly enough, the number of comments and traffic went up after I cracked down on Shadowfax. His antics were driving people away.

Now I have not approved quite a few of Mr. Pug's comments. Usually its because they are way off topic and a few times they have been anti-Semitic.

Calling BS said...

So, are you saying you shit can every post that disagrees with you or challenges you or just those from The Shadow?

Touchy Touchy KF. You're sounding more like 'that lady' across town every day.

Uh Oh...this one won't make it.

Pugnacious said...

Something's rotten in the Golden Triangle! Bigger Piece of the Pie, listen up!

The scuttlebutt is that Severstal(formerly Servecorr[enti]) is being sold to Brazil's Rima Industrial SA. Rima Hodings USA is the American affiliate and is also involved in John Correnti's Mississippi silicon in Burnsville. Lowndes county rejected Correnti's scheme to build the plant in Columbus. He then went to Natchez. Apparently, Adams county didn't take the bait, either.

Pugnacious said...

As a side note, the NE Mississippi area was once thriving with cut-n-sew textile plants...almost all gone now to Mexico and China after the Cochran-Lott NAFTA "free trade" agreements(treaties) after Lott "fast tracked" them around Congress.
The military clothing and GSA contracts that once were held by Mississippi companies are almost exclusively held by Propper International, which has production facilities in Puerto Rico. The growing prison industries have also taken a toll on jobs in Mississippi.

Blame it on Thad.


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