As some of you may know, when some companies take a huge nosedive in price to its 52 week low, I like to take a closer look at it to see if it's worth buying. Rockpoint Gas Storage is a publicly listed natural gas storage company that was spun out of Brookfield Infrastructure and it is now trading at below it's IPO price. What I found is what is very common among companies which are spun out by private equity. This company has about 1.2 billion in assets and it was also saddled with 1.2 billion in debt. So, it looks like Brookfield sold 3 billion of market cap in shares of a 1 billion dollar company that is 1 billion in debt, so it literally has a net asset value of zero. Lovely. At some point, this company will sink under its debt load and likely fail. I feel like at that point, Brookfield will likely use some of their 3 billion of proceeds to buy it back out of bankruptcy for a dollar and then sell it to more unsuspecting retail investors. Yes, that's me being cynical. 😝 $RGSI
784 views
2 Comments
Koch H
@Noahaaaaaaaaa · 1mo
I sold out of it. Made money twice on it
Roger
@Rossaaaaaaaa · 1mo
I looked at it last year but passed and bought ARC at $21 then sold at 32$
See the full comment section 👀Sign up for the full Blossom experience!
