dabqs, thanks for posting your thoughts. I look at Poseidon in 2 parts. Part 1 is the security as a shareholder you get from book value. The key to figuring out what book value is obviously figuring out how much of the receivables will be collected. I should point out that Poseidon will have to collect far more than half of a/r to pay off their liabilities. As of Sept 30, Poseidon owed $55 million on their line of credit. However, they also owed another $23 million on accounts payable, $7.4 million for dividend payabe, and $6.6 million for taxes payable. Also, you can add another $15 million for the Oct and Nov dividend payable. Add it all up and your liabilities are around $107 million. From that you can deduct any positive cash flow from Q4. The point I am making is that Poseidon will have to collect a lot more than you think from a/r to pay off the line or credit and other liabilities. Most of these liabilities are due to paying out a dividend. Just shows you how stupid the financial management of Poseidon has been.
The second part of Poseidon is trying to figure out what is a true run rate for revenue and what is a reasonable margin going forward. This is very difficult to figure out as Poseidon does not break out utilization rates nor average daily rental rates. Even if the oil and gas business recovers I doubt that the margins will ever be as high as they were in the past. There is just too much competition out there and I expect margins to be driven lower in the future. I will wait until I see how the Q4 numbers look.