The Peabody Energy Story
In full disclosure, I am a current stockholder of Peabody Energy Corp. I have been an owner since 2015. The stock prices have declined from about $30 a share to now worthless. I only have 300 shares and decided to hold on and see what would happen. My worst fears have been realized. I have lost a total of $6000.
- Apr. 2017
The EPA and Obama Years
When President Obama came into office in 2009, he vowed to put coal plants out of business. By way of regulations through the EPA, he has made Carbon dioxide a target and a pollutant. The EPA issued tightened exhaustion limits on power plants that made it more expensive to burn coal. The demise of Peabody was written on the wall. Sooner or later, it would fail under government regulations.
Natural gas is a cleaner burning fuel. It is also cheap with recent fracking technology. Some power plants have converted from coal to gas for those reasons. It is also a contributing factor in the decline of coal.
In 2016, after years of operating losses, Peabody finally filed for Chapter 11 bankrupcy. Negotiations were underway to save the company. It still holds tremendous assets around the world. Yet, it is doomed. The current condition was ripe and clear alternatives and price will determine the final outcome.
Stock Prices History - 5 years ($450 to 0.44)
Climate Change and War on Coal
There is no question that the war on coal is tied to climate change and the desire to reduce carbon dioxide emissions. In China where coal is abundant and very cheap, has also seen a decline due to climate change. It is a hard argument to make to poor farmer in remote areas of China that they need to stop using coal and pay more for alternative energy sources. They don't have the luxury of Europe or the United States.
The Trump Administration 2017
The surprise election of President Trump in the fall of 2016 gave Peabody and the coal industry a life line. The EPA has also been reigned back. Perhaps coal will make a come back. It is still too early to tell.
It may be too late for me. With the emergence of Peabody out of bankruptcy, the company is saved. Hopefully many jobs are saved as well. The real losers are the shareholders. Sometimes, only judges seems to know the right course of action. Or do they? I wonder.
The symbol BTUUQ is defunct. A new symbol BTU (original stock symbol) is now trading at $31.
How is this possible?
where is the SEC when you need them? Aren't they suppose to watch out for the small investor?
I received the following response after I filed a complaint to the SEC - 4/7/2017
"Thank you for contacting the U.S. Securities and Exchange Commission (SEC).
We appreciate you informing us of your concerns regarding Peabody Energy. The SEC’s Office of Investor Education and Advocacy processes many comments from individual investors and others. We keep records of the correspondence we receive in a searchable database that SEC staff may make use of in inspections, examinations, and investigations. In addition, some of the correspondence we receive is referred to other SEC offices and divisions for their review. If they have any questions or wish to respond directly to your comments, they will contact you.
For information about corporate bankruptcy and the SEC’s limited role in connection with bankruptcies, please carefully review our Investor Publication, What Every Investor Should Know: Corporate Bankruptcy, at https://www.sec.gov/investor/pubs/bankrupt.htm. Please also review our investor bulletin at https://www.investor.gov/additional-resources/news-alerts/alerts-bulletins/investor-bulletin-bankruptcy-public-company.
Thank you for communicating your views."...
Not much helpful information from the SEC.
The Moral of the Story...
In light of the response I received from the SEC, here is what you should all do. Whenever a company files for Chapter 11, liquidate all your holdings immediately. That is the only sure way to preserve the little value it holds.
Most of the times, the lawyers and big money changers will preserve the assets that is left and the stockholders are out in the cold.
This is a harsh lesson to learn.
Start of new BTU 4/4/2017
Last 5 days of BTUUQ
Some Related Info
- Peabody Emerges From Bankruptcy - Peabody Energy Corp. (NYSE:BTU) | Seeking Alpha
- Peabody Energy : Home
Peabody Energy is the world’s largest private-sector coal company and a global leader in sustainable mining and clean coal solutions.
- Dangerous Legal Precedent Set By Peabody Energy - Peabody Energy Corp. (OTCMKTS:BTUUQ) | Seeking Alp
© 2017 Jack Lee