Opportunities in smallcaps header image 2

Daily Destortions on InterOil no.3 and 4.

July 31st, 2008 · 6 Comments

We’ll show you some funny predictions first. 

This Jaxson905 who, without any geological background, has composed a lengthy geological theory without using any geological sources even (in fact, he hasn’t used much sources anyway). He made a couple of funny predictions though:

  • Monday, August 15, 2005. Investment Thesis – I recommend a short position in InterOil (Ticker: IOC) with a target price of between $3 and $9/share vs. the current stock price of $25/share [Jaxson905]
  • Tuesday, November 21, 2006. I recommend a short position in InterOil Corporation (Ticker: IOC) and believe the stock could be worth $0-3/share over the next 12 months vs. its current $22 share price. [Jaxson905]

Hmm, this guy’s predictions are really on the mark.. Here are some words from Bostonkenmore:

  • These people have never been right about anything. If people are aggressive and shady in other areas of their company, more than likely their shady about their estimates as well. [Bostonkenmore]

Is he talking about these wildly off predictions by his guru Jaxson? No, he was talking about InterOil and finance house Raymond James, whose analyst Wayne Andrews covers InterOil.

Boston slams analyst  Wayne Andrews from Raymond James on a regular basis for getting the refinery earnings wrong (which he actually hugely UNDERESTIMATED last quarter)…

  • No what I slam him for is being way way off the mark and then congratulating IOC on a “good” quarter.” How can you have a “good quarter” if they didn’t do nearly as well as you expected? They guy isn’t objective and basically ignores the mountain of negative information about Interoil. [Bostonkenmore]

Not happy with that, he slams Raymond James and his analyst Wayne Andrews on a regular basis:

  • He always spins. He’s not objective when it comes to Interoil. No matter what the news is, it somehow increases the probability that Interoil will have riches. Wayne Andrews is supposed to be objectively analyzing the company. Yet instead he lobs softball questions and backslaps, and tells the Times, “I always knew this company would be great”. [Bostonkenmore]

Even calling him a liar:

  • “As far as RJ goes, I hate to say it, but you might as well call him a liar. I mean calling everything the reports say ‘spin’ is basically calling him a liar, plain and simple.”
  • Spin is different from out and out lying. Interoil may actually have believed it had “Saudi Arabian sized oil fields”, but that is certainly spin. [Bostonkenmore]

Distortion #4

  • I think an analyst starts to lose credibility when all news is good news. IOC files a shelf for $200M. Money that supposedly they didn’t need because they were on the verge of getting a strategic partner which is Andrew’s words, “would create a valuation many times their adjusted NAV.”
  • What does RayJay do? Come up with something. That something is the new “Liquid Stripping Plant”. [Bostonkenmore]

That last part is actually nonsense, as we pointed out that the possibility of a liquid stripping plant was already mentioned before, on a RJ update on the 7th of July, more than two weeks before.

  • From RJ 7/7 update:”natural gas with a high liquid content can dramatically increase the value of the entire LNG project.” This is a very promising focus, as we know from the two previous DST’s that the liquids are increasing with depth. It’s also a crucial parameter in the negotiations with the strategic partner, more liquids, higher value. If those liquids reach a threshold, around 25 Bbls/MMcf a liquids stripping plant could be a viable option. [STPIOC]

So, for once he comes up with an example where RJ is wrong, and that immediately turns out to be nonsense.

And more lies which we will deal with the next time (Distortion #5)

  • “Actually Wayne had an IOC price target of 100$ 3 years ago.” Since 7.5% of Elk was sold a year ago for a price that implies a lot less than $100, I’d say that this means he’s not credible. [Bostonkenmore]

We will have to deal with the second part of that message in the next episode, as it turns out to be nonsense as well (no surprise there..)

As a parting remark, all the quantity and lack of substance in his attacks are really noteworthy, but if you question his credibility, for instance by confronting him with an old post of his and prove it was wrong, he cries “all you guys have personal attacks”..

Tags: Daily Distortions · IOC

6 responses so far ↓

  • 1 Jim Tate // Jul 31, 2008 at 9:40 pm

    You can publish a book with all this stuff. huh. Good job..

  • 2 admin // Jul 31, 2008 at 9:54 pm

    A book we don’t know, but we’re not done yet, not by a long shot..

  • 3 Jim Tate // Aug 1, 2008 at 4:17 am

    Not sure the bozos are worth the effort.JMHO

  • 4 admin // Aug 1, 2008 at 5:12 pm

    Reader statistics show otherwise Jim.. 🙂

  • 5 Jim Tate // Aug 1, 2008 at 7:38 pm

    I am an opinionated person huh. Right or wrong.

  • 6 Daily Distortions on InterOil no 5 // Aug 2, 2008 at 12:54 am

    […] the efforts are often quite funny as well. You can find our first two examples here, the next two here. Now, the next […]