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Ok, need to make a post re: $ZIM
First, this post was a starting point, not an accusation, so please don't take it personally if you're in this name: https://twitter.com/calvinfroedge/status/1360063360226705409?s=20
First, this post was a starting point, not an accusation, so please don't take it personally if you're in this name: https://twitter.com/calvinfroedge/status/1360063360226705409?s=20
I've only spent a few hours looking at this and @mintzmyer @GMJournalist and others have put in a lot of time.
This could be a fantastic investment. As @StevenH45332279 pointed out, $ZIM will make around $3/share in Q4. Their dividend policy is up to 50% of *annual* EPS.
This could be a fantastic investment. As @StevenH45332279 pointed out, $ZIM will make around $3/share in Q4. Their dividend policy is up to 50% of *annual* EPS.
If the container market keeps moving up, they should be able to repeat that performance. @AllVentured @mintzmyer @joeriwestland and other guys I really respect are super bullish on container macro.
But there are some risks here too, and I just want to point them out...
But there are some risks here too, and I just want to point them out...
First, @GMJournalist put together this great article. There's a super important part regarding $ZIM business model. They charter in 98% of their fleet.
https://www.freightwaves.com/news/shares-of-ocean-carrier-zim-jump-64-after-abysmal-debut
https://www.freightwaves.com/news/shares-of-ocean-carrier-zim-jump-64-after-abysmal-debut
Since a huge portion of those ships were chartered in at super high rates in Q420 and Q121, seems $ZIM would be in a bit of trouble if for any reason, container rates moved down.
Right now that's not a problem because rates are a straight moonshot.
Right now that's not a problem because rates are a straight moonshot.
$ZIM was not profitable in 2019, and unless someone else has better info, their prospectus says dividends are paid annually. Your 2020 dividend seems guaranteed. $1.50? $2.00?
For 2021, A reversal of container fortunes would mean $ZIM is locked into high charter levels.
For 2021, A reversal of container fortunes would mean $ZIM is locked into high charter levels.
What could be a catalyst for the container market reversing? I have no idea. The other guys mentioned in this thread are the container experts. Maybe it doesn't. Maybe fully diluted $ZIM makes $12-15 per share next year, the party keeps going till 2023, and you get monster divs.
That brings me to another point. The trading float as of today is (I think) 14.5M shares. In 6 months a lockup period expires and another 100M shares become tradeable.
Maybe not an issue, and maybe none of those shares get sold. But it is an event you should be aware of.
Maybe not an issue, and maybe none of those shares get sold. But it is an event you should be aware of.
$ZIM is also currently not optionable, meaning you can't hedge your position, and it won't be for the next year.
Anyway, if anything happens, a war, a change in trade flows - I have no idea what would kill the container boom - maybe nothing can - well it's hard to hedge bets.
Anyway, if anything happens, a war, a change in trade flows - I have no idea what would kill the container boom - maybe nothing can - well it's hard to hedge bets.
Anyway, just remember, $ZIM leases these ships, they don't own them. They'll continue making a ton of money in a rising market. Their dividends are (I think) paid annually, not quarterly. Look out below if something changes in the next 6 months and the lockup period expires.
Of course best of luck to all, I hope you make lots of money and I hope everything goes perfectly!
