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EnigmaDude (97.98)

Ram On!

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December 23, 2011 – Comments (4) | RELATED TICKERS: HK

RAM Energy Resources Inc. (RAM) said Halcon Resources LLC, a company led by former Petrohawk Energy Corp. Chief Executive Floyd C. Wilson, agreed to provide a $550 million capital injection, half of which will give it a majority stake in the oil-and-gas explorer. RAM Energy's shares surged 36% to $1.50 premarket.

Since that news hit the wires yesterday, the stock has already more than doubled ($2.80+ today) and is still trading higher as I write this.  Although Rodman and Renshaw downgraded the stock, some think it could go much higher from here.  I have been watching this stock for a while (thanks to BravoBevo for bringing it to my attention!) and it was doing OK before this news.  I think a better entry point will be coming soon but I would not expect the share price to drop much before it takes off again.

Does anyone else have any additional insights?  I have no stake in this stock currently, but thinking about initiating a small position in real life.

Ram On!  and Merry Christmas to all!

4 Comments – Post Your Own

#1) On December 28, 2011 at 1:24 AM, kwt306 (< 20) wrote:

I'm fairly close to this play.  The story isn't RAM heretofore but is the new CEO, Floyd Wilson, and his team's track record of success.  He is well connected in the capital markets (private equity, etc) and knows as well as any how to grow, mostly inorganic through M&A.  Look at Petrohawk from mid 2003 when he bought it until they sold for 12B earlier this year.  An annotated stock chart is a good way to view it.  You'll see every few months new acquisitions and recapitalizing and continuous market cap growth.  Halcon (Spanish for hawk) should be Petrohawk II.  I agree with you that there may be better near term entry prices but long term this should be a great stock.

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#2) On December 29, 2011 at 11:17 AM, EnigmaDude (97.98) wrote:

Put my money where my mouth is and bought a few shares today.

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#3) On December 29, 2011 at 6:51 PM, Teacherman1 (48.82) wrote:

I hope you didn't buy too much yet.

It looks like the new shares will be issued at $1.25 each, and will represent 75% of the outstanding at that time.

That would mean a good buy in price would be in the $1.65 to $1.75 range.

They will also get warrants to buy more at $1.50 per share.

Of course, the price may never drop, and in the long run today's price might look very good.

I have it on my watch list, and if the overall market does a "schitzo" move, or the excitement wanes a little, I will likely make a purchase.

Would be willing to pay some "premium", but today's price is about a 75% premium.

Halcon paid (or more correctly is going to pay) about a 20% to 25% premium over what it was at before the announcement.

Good luck with this and I hope you make more money than you can spend.:)

JMO and worth exactly what I am charging for it.

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#4) On January 06, 2012 at 5:42 PM, EnigmaDude (97.98) wrote:

Here is what it says in the 8-K filed with the SEC:

The Board of Directors of the Company and the Board of Halcon have approved the Purchase Agreement and the Securities Purchase. Holders of a majority of the Company's outstanding shares of common stock (the "Majority Stockholders") have executed a stockholders agreement (the "Stockholders Agreement") pursuant to which such stockholders agreed to execute and deliver by January 20, 2012, a written consent (the "Company Stockholder Approval") approving (i) the issuance of the Shares, the Note and the Warrants pursuant to the terms of the Purchase Agreement; (ii) the amendment of the Company's certificate of incorporation to (A) increase the Company's authorized shares of common stock from 100,000,000 shares to 1,010,000,000 shares; (B) effect a one (1)-for-three (3) reverse stock split of the Company's common stock upon satisfaction of the notice requirements of the NASDAQ Stock Market following the closing; and (C) change the name of the Company to Halcon Resources Corporation; (iii) the amendment of the Company's 2006 Long-Term Incentive Plan to increase the number of shares that may be issued under the plan from 7.4 million to 11.1 million shares; and (iv) on an advisory (non-binding) basis, the compensation to be paid to the Company's named executive officers that is based on or otherwise relates to the transactions contemplated in the Purchase Agreement.

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