2006-10-13

Real F-you Money

"...a very presentable net worth of $10 million, $20 million, or even $50 million, sadly, leaves one flying commercial. Hedge-fund money, by contrast, can put you into exhilarating conversations about the advantages of owning a Gulfstream versus a Falcon."

link

The previous brought to you by JRCC, which has had a precipitous price drop to about $13 from around $40 in the early part of this year. It was around then that Pirate Capital, an activist hedge fund, invested heavily in JRCC. A look into the background of the players turned up the amusing link.

Among Pirate Capital's comments on JRCC

"...management's failure to articulate to the investment community a cohesive operational and financial strategy, together with its demonstrated inability to meet earnings consensus. This financial underperformance has led the rating agencies to lower credit ratings on the Company's senior notes to a precarious CCC+/B3. We attribute these missteps to CEO Peter Socha's lack of operating experience within the coal industry and to the Company's lack of a CFO."

"We are outraged that the Board of Directors (the "Board") has sat silent in the wake of the Company's gross mismanagement, while receiving egregious compensation packages under the Company's 2004 Equity Incentive Plan. Additionally, we continue to be discouraged with the Company's archaic corporate governance policies..."

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