Real Industry Inc (NASDAQ:RELY) Files for Bankruptcy Protection

Real Industry Inc (NASDAQ:RELY)

Real Industry Inc (NASDAQ:RELY) voluntarily filed for Chapter 11 bankruptcy protection, sending its stock down over 45% less than a week after the stock lost over 60% in a single day. RELY shares are currently trading around $0.30 on volume over ten times the daily average.

Real Industry Inc (NASDAQ:RELY)ban

Real Industries Bankruptcy

Real Industry Inc (NASDAQ:RELY) U.S. operations have experienced a loss of liquidity during the past year. This was mostly due to the lack of acceptable credit terms which would have enabled the company to refinance its $305 million 10% senior secured notes due January 2019. The Chapter 11 with enhanced liquidity in the form of Debtor-in-possession (DIP) financing which will include the continued use of the company’s $110 million asset-based lending facility, and up to $85 million in incremental liquidity provided by certain holders of the Senior Secured Notes.

The DIP financing also includes the conversion of $170 million of Senior Secured Notes into new notes. Subject to court approval, this DIP financing combined with funds generated from ongoing operations will be used to support Real Alloy’s normal operations during the reorganization effort under Chapter 11. Real Industry Inc (NASDAQ:RELY) has filed the customary motions in order to make operating payments during the Chapter 11 proceedings and expects to receive such approval shortly.

[Note: Not included in the Chapter 11 filings are Real Alloy’s operations in Germany, United Kingdom, Norway, Canada, and Mexico and its Goodyear, Ariz. joint venture.]

Sherman Oaks, CA-based Real Industry Inc (NASDAQ:RELY) is a holding company that seeks to create a sustainably profitable business acquiring companies that meet strict metrics with regards to value and structure. Our business strategy also seeks to take advantage of Real Industry’s U.S. federal net operating loss tax carryforwards of $916 million.

The company, through its subsidiaries, is involved in aluminum melting, processing, recycling, and alloying activities in the United States and internationally. The company operates in two segments, Real Alloy North America and Real Alloy Europe. It processes scrap aluminum and by-products. It manufactures wrought, cast, and specification or foundry alloys.

RELY Stock Performance

Real Industry Inc (NASDAQ:RELY) reported sales of $1.25 Billion for 2016. However, the company has a market capitalization of less than $20 million. Earnings have been negative since 2012 when the company posted a per share loss of (-$0.34). By 2016, that loss had grown to (-$3.71).

In mid-2016, RELY shares were hitting resistance at $9. A steady slide in the share price ensued and by August shares were meeting support around $1.75. Year-to-date, RELY stock has lost over 90% of its value. In the past week it has lost over 70% of its value.

I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.

Don’t miss out! Stay informed on $RELY and receive breaking news on other hot stocks by signing up for our free newsletter!

About the author: Steve Clark is a 23-year Wall St professional with stints in M&A, risk management, and algorithm trading. Steve keeps his head in the game by looking for, and writing about, small companies that often get overlooked by the big investment firms.

Real Industry Inc (NASDAQ:RELY)

Real Industry Inc (NASDAQ:RELY) Shares Take Dive

Real Industry Inc (NASDAQ:RELY)

Real Industry Inc (NASDAQ:RELY) stock cratered on Friday, losing over 65% on a volume figure that was almost 90 times the listed daily average. RELY shares gapped down to open at $1 from their Thursday close of $1.70, then went on to make a new 52-week low of $0.25 before closing at $0.65.

Sherman Oaks, CA-based Real Industry Inc (NASDAQ:RELY) is a holding company that seeks to create a sustainably profitable business acquiring companies that meet strict metrics with regards to value and structure. Our business strategy also seeks to take advantage of Real Industry’s U.S. federal net operating loss tax carryforwards of $916 million.

The company, through its subsidiaries, is involved in aluminum melting, processing, recycling, and alloying activities in the United States and internationally. The company operates in two segments, Real Alloy North America and Real Alloy Europe. It processes scrap aluminum and by-products. It manufactures wrought, cast, and specification or foundry alloys. The company serves the automotive, consumer packaging, aerospace, building and construction, steel, and durable goods industries, as well as wrought alloy producers, foundries, and casters.

Real Industry Business

Real Industry Inc (NASDAQ:RELY) reported sales of $1.25 Billion for 2016. However, the company has a market capitalization of less than $20 million. Earnings have been negative since 2012 when the company posted a per share loss of (-$0.34). By 2016, that loss had grown to (-$3.71).

Unfortunately, the earnings losses were not the only headwind experienced by shareholders. In 2014 the company had 13.4 million shares outstanding. In the next two years the company issued more shares, thereby diluting shareholder equity, and by the end of 2016 the number of outstanding shares was listed at 28.72 million.

RELY Stock Performance

In mid-2016, RELY shares were hitting resistance at $9. A steady slide in the share price ensued and by August shares were meeting support around $1.75. Then, On Friday, RELY shares plummeted below the $10 handle. That level is not just important psychologically, the NASDAQ Market has rules that mandate a share’s bid price remain over $12 for a specified amount of time or else the stock could be de-listed.

Year-to-date, RELY stock has lost over 90% of its value. In the past week it has lost 64% of its value. However, the two firms that follow Real Industry Inc (NASDAQ:RELY) rate RELY shares as a “Strong Buy” with a consensus, one-year price target of $5.

I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.

Don’t miss out! Stay informed on $RELY and receive breaking news on other hot stocks by signing up for our free newsletter!

About the author: Steve Clark is a 23-year Wall St professional with stints in M&A, risk management, and algorithm trading. Steve keeps his head in the game by looking for, and writing about, small companies that often get overlooked by the big investment firms.