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Central Pacific Financial’s Potential $1B Acquisition Of American Savings Bank FSB Sparks Interest

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Written by Timothy Sykes Reviewed by Jack Kellogg Fact-checked by Ellis Hobbs

Hawaiian Electric Industries Inc. is facing significant market pressure following revelations about its potential role in the Maui wildfires and a downgrade in its debt rating. The company is also grappling with the financial implications of these events, impacting investor sentiment. As a result, on Thursday, Hawaiian Electric Industries Inc.’s stocks have been trading down by -8.83 percent.

  • Central Pacific Financial is discussing raising $1B from alternative asset investors to acquire American Savings Bank FSB from Hawaiian Electric Industries amidst significant losses from last year’s wildfires on Maui.
  • A Maui judge facilitated a $4B wildfire settlement for Hawaiian Electric, limiting insurance companies’ recourse to pre-agreed settlement funds, as HE navigates bankruptcy concerns.
  • Hawaiian Electric’s financing capability may be compromised by ongoing legal disputes, impacting potential business stability and causing financial overhangs despite efforts to address “going concern” risks.

Candlestick Chart

Live Update at 10:51:42 EST: On Thursday, September 19, 2024 Hawaiian Electric Industries Inc. stock [NYSE: HE] is trending down by -8.83%! Discover the key drivers behind this movement as well as our expert analysis in the detailed breakdown below.

Hawaiian Electric Industries’ Recent Earnings Report: Key Financial Metrics

Hawaiian Electric Industries (HE) has had a turbulent year, significantly reflected in its recent earnings report. Their revenue touched $897.36M, indicating a slight uptick, but consistent headwinds dampened overall performance. This is a tale of mixed fortunes.

Financial Highlights:

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  • Revenue stood at $897.36M, providing a foundation to assess how core business activities are faring amidst broader financial challenges.
  • Profitability Concerns: Despite revenues, HE posted a net loss of over $1.22B. This dramatic downturn is a glaring signal of the operational and financial turbulence they face.
  • Operational Expenses: The operating income plummeted to negative $1.64B, showcasing how overheads and exceptional charges—likely linked to wildfire settlements and operational setbacks—have gutted profitability.
  • Earnings Per Share (EPS): It dropped sharply to negative $11.74, painting a bleak picture for investors accustomed to steadier returns.

Glancing at these figures, Hawaiian Electric’s financial landscape seems fraught with daunting challenges. Their leverage ratio of 15.7 is staggering, highlighting the heavy debt burden. A price-to-sales ratio of 0.49 and price-to-free cash flow ratio of 4.8 underscore a company grappling with valuation strain amidst a liquidity crunch.

Yet, their quick maneuver in the Maui wildfire settlement, guarding cash flow essential for operational longevity, is a strategic move worth noting. The situation, albeit dire, is layered with complexities and pivotal moves.

Legal Implications:

From a legal standpoint, the wildfire settlement granted by a Maui judge significantly impacts HE’s financial ecosystem. Limiting insurance companies to pre-agreed settlement amounts dilutes HE’s immediate fiscal exposure but extends a shadow over potential long-term reimbursement scenarios. This creates a precarious balancing act—a tightrope walk between mitigating immediate fiscal threats and managing prolonged legal encumbrances.

Market Sentiment and Stock Movements

The recent dip in HE stock prices lays bare investor sentiment enveloped in caution and speculation. A closer look at HE’s price movements reveals a narrative punctuated by legal battles, financial settlements, and strategic adaptations.

More Breaking News

Historical Data Insights:

A recent stock chart encapsulates their struggle— from highs of around $12 to dives below $11. Notably, the stock opened at $12 on 18 Sep 2024, with minor fluctuations close to $11.995 by 19 Sep 2024. Volatility insinuates market apprehension.

Intraday Movements: Analyzing intraday behaviors, the stock showed vigorous shifts— a sine curve reflecting market reactions to broader financial disclosures and settlement decisions. For instance, a notable drop from $12 to $11.995 occurred within an hour, embodying market jitteriness.

Stock price oscillations embody this turmoil: fluctuating between mid to high $11s, ultimately culminating at $10.995 on 19 Sep 2024. In many ways, such shifts underscore the randomness driven by legal and financial news.

Strategic Considerations:

For stakeholders, the path forward requires navigating unpredictable terrains. Whether through leveraging alternative capital buffers, aptly concluding ongoing legal frictions, or expanding profitable ventures, each decision must critically balance risk and reward.

In the larger market discourse, Hawaiian Electric’s journey, punctuated by a strategic financial ballet amid legal and operational headwinds, highlights a sector fraught with volatility yet brimming with potential redemption given calculated, bold moves.

Conclusion

Hawaiian Electric Industries grapples with an eventful, albeit challenging, fiscal timeline. Courtroom triumphs interspersed with substantial financial setbacks illustrate a company maneuvering through uncharted waters. Yet, strategic foresights, proactive settlements, and financial recalibrations offer potential pivots for resilience.

As investors and stakeholders dissect the narratives, they must weigh immediate impacts against future strategic stability, contemplating risks and poised gains. The journey may be tumultuous, but with calculated moves, HE could potentially course-correct, translating present adversities into future solidities. Balancing these insights will be key to navigating Hawaiian Electric’s evolving financial narrative.

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Timothy Sykes

Tim Sykes is a penny stock trader and teacher who became a self-made millionaire by the age of 22 by trading $12,415 of bar mitzvah money. After becoming disenchanted with the hedge fund world, he established the Tim Sykes Trading Challenge to teach aspiring traders how to follow his trading strategies. He’s been featured in a variety of media outlets including CNN, Larry King, Steve Harvey, Forbes, Men’s Journal, and more. He’s also an active philanthropist and environmental activist, a co-founder of Karmagawa, and has donated millions of dollars to charity. Read More

* Results are not typical and will vary from person to person. Making money trading stocks takes time, dedication, and hard work. There are inherent risks involved with investing in the stock market, including the loss of your investment. Past performance in the market is not indicative of future results. Any investment is at your own risk. See Terms of Service here

The available research on day trading suggests that most active traders lose money. Fees and overtrading are major contributors to these losses.

A 2000 study called “Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors” evaluated 66,465 U.S. households that held stocks from 1991 to 1996. The households that traded most averaged an 11.4% annual return during a period where the overall market gained 17.9%. These lower returns were attributed to overconfidence.

A 2014 paper (revised 2019) titled “Learning Fast or Slow?” analyzed the complete transaction history of the Taiwan Stock Exchange between 1992 and 2006. It looked at the ongoing performance of day traders in this sample, and found that 97% of day traders can expect to lose money from trading, and more than 90% of all day trading volume can be traced to investors who predictably lose money. Additionally, it tied the behavior of gamblers and drivers who get more speeding tickets to overtrading, and cited studies showing that legalized gambling has an inverse effect on trading volume.

A 2019 research study (revised 2020) called “Day Trading for a Living?” observed 19,646 Brazilian futures contract traders who started day trading from 2013 to 2015, and recorded two years of their trading activity. The study authors found that 97% of traders with more than 300 days actively trading lost money, and only 1.1% earned more than the Brazilian minimum wage ($16 USD per day). They hypothesized that the greater returns shown in previous studies did not differentiate between frequent day traders and those who traded rarely, and that more frequent trading activity decreases the chance of profitability.

These studies show the wide variance of the available data on day trading profitability. One thing that seems clear from the research is that most day traders lose money .

Millionaire Media 66 W Flagler St. Ste. 900 Miami, FL 33130 United States (888) 878-3621 This is for information purposes only as Millionaire Media LLC nor Timothy Sykes is registered as a securities broker-dealer or an investment adviser. No information herein is intended as securities brokerage, investment, tax, accounting or legal advice, as an offer or solicitation of an offer to sell or buy, or as an endorsement, recommendation or sponsorship of any company, security or fund. Millionaire Media LLC and Timothy Sykes cannot and does not assess, verify or guarantee the adequacy, accuracy or completeness of any information, the suitability or profitability of any particular investment, or the potential value of any investment or informational source. The reader bears responsibility for his/her own investment research and decisions, should seek the advice of a qualified securities professional before making any investment, and investigate and fully understand any and all risks before investing. Millionaire Media LLC and Timothy Sykes in no way warrants the solvency, financial condition, or investment advisability of any of the securities mentioned in communications or websites. In addition, Millionaire Media LLC and Timothy Sykes accepts no liability whatsoever for any direct or consequential loss arising from any use of this information. This information is not intended to be used as the sole basis of any investment decision, nor should it be construed as advice designed to meet the investment needs of any particular investor. Past performance is not necessarily indicative of future returns.

Citations for Disclaimer

Barber, Brad M. and Odean, Terrance, Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors. Available at SSRN: “Day Trading for a Living?”

Barber, Brad M. and Lee, Yi-Tsung and Liu, Yu-Jane and Odean, Terrance and Zhang, Ke, Learning Fast or Slow? (May 28, 2019). Forthcoming: Review of Asset Pricing Studies, Available at SSRN: “https://ssrn.com/abstract=2535636”

Chague, Fernando and De-Losso, Rodrigo and Giovannetti, Bruno, Day Trading for a Living? (June 11, 2020). Available at SSRN: “https://ssrn.com/abstract=3423101”