|Price:||59.00||EPS||TTM 1.05 Finviz||5.6 Finviz|
|Shares Out. (in M):||762||P/E||51||10|
|Market Cap (in $M):||4,500||P/FCF||-||n/a|
|Net Debt (in $M):||2,200||EBIT||0||0|
|Borrow Cost:||Available 0-15% cost|
Here's another short write up.
You are going to need google translate if you don't read spanish.
Pampa energia is a large energy producer in Argentina that is about to get skewered because of the Lava Jato investigations in Brazil.
1) As a primer, PAM bought Petrobras's assets in Argentina.
You can be absolutely sure that there is no way that this deal got done without a massive amount of corruption and in particular because it involved Argentines and Brazilians during the populist administrations of Dilma / Cristina. The bribe triangle involved the administrations of Argentina, Brazil, Bolivia and Venezuela hiding and generating bribes for each other in outside jurisdictions so that it would not fall for the domestic justice system to investigate. If you look at the purchase price of the transaction you will notice that it was substantially below value.
2) Most recently PAM's main shareholders independently of PAM bought the assets of Angelo Calcaterra, the cousin of the president of Argentina who was involved in the construction business in Argentina as the partner of............................................ some of you may have guessed it........ coming coming ....
the owner of which is in jail for admitting to billions of dollars in bribes and as Oderbrech is a huge multinational and Brazil is next to Argentina you can see where this goes and went.
This last transaction was done to pretend that the administration was not doing business with family members....
The President, his cousin and the main argentine shareholder of PAM have recently been accused in a criminal investigation by an Argentine congresswoman associated with the Kirchners
Since mid term elections are coming up in Argentina in October the president is working like crazy to keep the judiciary in check to not have a mess like they had in Brazil bubble up, but it is going to be very very difficult to contain. There were a lot of deals between Argentina and Brazil and Pampa and its large argentine shareholder is in the MIDDLE of the whole mess. Pampa has run up like crazy because everybody realized that they bought a highly undervalued asset and then you tack on the Vaca Muerta nonesense and it looks like a great story except that the story is great precisely because the argentine owners are involved in these messes such as being the buyer of the president's cousin's business so that the administration can pretend that it has no conflicts of interest.
Unlike JBS and Odebrecht PAM trades in the US which is going to give the SEC a nice incentive to investigate this mess here rather than in the nonesense jurisdictions of Latin America.
I am short and will be getting shorter or covering or doing whatever I want with my position.
Expansion of Lava Jato investigation to Argentine judiciary.
While ordinarily an investigation into this sort of thing would take years to do or never happen in Latin America, the Brazilian revelations as well as the close relatioship between Dilma and Cristina as well as the upcoming Argentine elections should collude to put PAM right in the cross hairs of an eager Argentine judge.
|Subject||I am SPECULATING as to corruption. I have no evidence.|
|Entry||05/22/2017 08:27 PM|
I am likely wrong to be wrong on this idea
There is a judge already looking at this and has called Pampa's main argentine shareholder to declare.
If nothing comes from this Brazilian investigation I will be totally wrong.
|Subject||Is that all you've got?|
|Entry||05/22/2017 09:13 PM|
Pampa may be a good short because: the stock has had a massive run; the current valuation discounts a lot of things that have yet to materialize; it is a crowded trade; a lot of non emerging market investors have been buying the stock blindly to get exposure to Argentina. However, the idea that Pampa colluded with the Kirschner administration is a bit bizarre considering that the company was constantly under attack from said administration. There were multiple money laundering allegations against the company's management from the Kirschner administration. They have gone nowhere. Your pitch is akin to saying, short this stock. It is in South America, and it is in the energy business. Therefore, there is an impending corruption scandal. Is that all you've got? Just curious.
|Subject||Re: Is that all you've got?|
|Entry||05/22/2017 10:26 PM|
The pitch is: 1) there is an upcoming midterm election in argentina (always a cause for vol) where the opposition is going to try to throw all sorts of corruption allegations at the present administration because the present administration pretends that it is holier than though and by showing that it is not the opposition will do better at the polls.
2) The Brasil investigations have taken on an entire new dimension post the JBS disclosures. ALL of brasil fell 15 pct in a day the other day as you know. Two investigations in Brazil lead DIRECTLY to this company through maybe no fault of their own but they do. The Petrobras purchase and the Calcaterra purchase. Off the top of my head I can't think of another target that is this easy in Argentina for the opposition.
Re collussion. IFFFF they colluded they colluded with Petrobras and the Brasilians to ensure they won the Petrobras purchase. The Calcaterra assets were completely tainted but PAMPA is semi immunized because 1) Macri will protect his cousin 2) Calcaterra made his money with the Kirchners so the oppossition will not want to dig up dirt on it and 3) Pampa does not own them. The ones that will want to dig up dirt on it are the Brazilians because Calcaterra's companies allegedly received 20 mln from Odebrecht. But you are going to have the largest shareholder up his eyeballs in Brazilian investigations something that American shareholders are unlikely to take kindly to.
And most likely I am wrong as happens with the vast majority of short ideas that never work and nothing happens
Not saying it goes to zero.
|Subject||Odebrecht offices in Argentina raided ... Getting closer .... a couple of click to the right and it|
|Entry||05/24/2017 04:48 PM|
|Subject||Wrong and covering..|
|Entry||08/14/2017 10:37 AM|
|Subject||Timing... as they say is EVERYTHING|
|Entry||09/03/2018 07:50 PM|