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Sounds kind of dirty, right? Actually, it's because of a clean visual that technical analysts use this term. Technical analysts like charts (hence their nickname of "chartists"), and they like to give certain patterns they see neat little names.
Such is the case with the double bottom, which looks on a chart like, well, a double bottom. Think of three mountains (on a chart reflecting a rise in values) separated by two valleys (representing dips in value). The troughs of the valleys, and the size of the first two peaks, are generally the same, so the chart looks like the letter 'W.' The appearance of those two valleys represents a double bottom.
So what? Well, if you're one of those folks who believes in the power of the charts, seeing a double bottom suggests a long-term trend is about to reverse. So, if a stock chart shows shares falling for several months, then seeing a double bottom, chances are good (according to the chartists) that the shares will rise. And vice versa.
But, beware: charts can be a great tool, but they're more art than science. Use any charts with caution.
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Friday, May 16, 2008
Severstal Announces Agreement to Acquire WCI Steel
Comtex
MOSCOW, May 16, 2008 /PRNewswire via COMTEX News Network/ ----OAO Severstal (LSE: SVST; RTS: CHMF; "the Company"), one of the world's leading metals and mining companies, today announced that it has reached a binding agreement to purchase WCI Steel (OTC: WCIS), a market leader in the production of value-added steel products based in Warren, Ohio.
According to the terms of the agreement, Severstal will acquire all outstanding equity of WCI for a total cash consideration of US$140 million, implying an enterprise value of US$327 million based on outstanding net debt as of April 30, 2008. The transaction is expected to be immediately accretive to earnings.
WCI's Board of Directors has recommended the transaction to its shareholders. Shareholders representing a majority of WCI's diluted shares outstanding have irrevocably consented to the transaction. The acquisition has the full support of the United Steel Workers ("USW").
WCI's total annual steel-making capacity of 1.22 million metric tons is focused on high-quality, custom flat-rolled steel for use in demanding applications. Together with Severstal's current US operations in Dearborn, Michigan, Columbus, Mississippi, and the recently acquired Sparrows Point in Baltimore, Maryland, WCI will grow the Company's North American leadership in the high-quality flat-rolled steel segment for the automotive, appliance, furniture, construction and energy markets.
The complementary nature of WCI's manufacturing facility and product offering to Severstal's existing US assets creates potential synergies that together with strong steel industry fundamentals leave WCI poised to add value across Severstal's US platform.
Gregory Mason, CEO of Severstal International and COO of OAO Severstal, commented, "This acquisition is aligned with Severstal's disciplined approach to growing our US business while creating shareholder value. It solidifies our position as the fourth largest steel producer in the US by raising Severstal's total US capacity to just under 11 million metric tons per year. The addition of WCI to Severstal's family will enhance our custom product capabilities and create opportunities to increase profitability in both the short- and long-term."
The acquisition is subject to customary closing conditions, including the receipt of all necessary government and regulatory approvals, and is expected to close in late 2Q / early 3Q08.
Citi and Raymond James are acting as financial advisors to Severstal on this transaction. Skadden, Arps, Slate, Meagher & Flom LLP is acting as legal counsel to Severstal.
About Severstal:
OAO Severstal is an international metals and mining company with a listing on the Russian Trading System and the London Stock Exchange. Incorporated in 1993, the company focuses on high value added and unique niche products and has a successful track record of acquiring and integrating high-quality assets in North America and Europe. Severstal owns mining assets in Russia, thus securing its supplies of raw materials. In 2007, Severstal produced 17.5 million tons of steel. Revenues were $15.2 billion and EBITDA was $3.7 billion. EPS was $1.92.
Forward Looking Statements:
This press release may contain projections and other forward-looking statements regarding future events or the future financial performance of OAO Severstal (Severstal). Forward looking statements are identified by terms such as "expect," "believe," "anticipate," "estimate," "intend," "will," "could," "may" or "might", the negative of such terms, or other similar expressions. Severstal wishes to caution you that these statements are only predictions and that actual events or results may differ materially. Severstal does not intend to update these statements to reflect events and circumstances occurring after the date hereof or to reflect the occurrence of unanticipated events. Factors that could cause the actual results to differ materially from those contained in projections or forward-looking statements of Severstal may include, among others, general economic conditions in the markets in which Severstal operates, the competitive environment in, and risks associated with operating in, such markets, market change in the steel and mining industries, as well as many other risks affecting Severstal and its operations.
For further information: Severstal Dmitry Druzhinin, Investor Relations +7 495 540 7766 Taylor Rafferty Michael Henson +1 212 889 4350 (o) +1 917 902 0767 (m)
SOURCE OAO Severstal
Copyright (C) 2008 PR Newswire. All rights reserved
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