Smurfit-Stone: bankrupt for a long time, in some ways?

UPDATE of "Smurfit-Stone calls in the bankruptcy lawyers, shares near 40 cents":

By the time I finished writing the prior Smurfit-Stone post, the stock had already dropped to around 4 cents (I discovered this while on the phone, noticing it via my handy Forbes.com "attache". Either at close, or in after-close trading, the thing collapsed. Since then, the company (it is SSCC for lookup in markets) indeed filed for bankruptcy (forgone conclusion with that stock price, isn't it?). The stock has been hovering in the mere pennies since then.

I put that commentary here at "Jonny O's Place," my personal grab-bag blog, because it is personal, even though I frankly think my thoughts fairly regard the ridiculous business habits of the company. I wanted those thoughts to be generally my personal feelings, since I am a bit saddened by having a poor opinion of a former employer. It is a sad statement that this "strong" company -- $7 billion in sales in 2007, or something huge as that -- was actually amazingly weak. In short, they were posing as a good company.

While my being a disappointed and rejected employee by SSCC could be simply disregarded as my being jaded, other stories provoked comments by others who view SSCC nearly the same exact way, there on Forbes.com -- I didn't even have to look far. Regarding opinions, the market smarty-pants seem to agree that SSCC will fail, taking it beyond mere bankruptcy. That's a worse outlook than I have, since I want to believe -- though knowing their odds are bad -- that they could pull out survival and not simply devolve into a massive reseller of their own equipment to competitors.

No Faith in Smurfit-Stone

Hours after filing for Chapter 11, Standard & Poor's slashed the company's debt rating to the lowest possible level. S&P analyst Pamela Rice cut the company's corporate credit rating to "D," or default status, from CCC. She has the recovery ratings on the company's senior secured debt at "2," which indicates "our expectations for substantial (70 percent to 90 percent) recovery," and the company's senior unsecured debt at "6," which indicates "our expectations for negligible (0 percent to 15 percent) recovery."

A Forbes user who states he works there comments thusly: "Smurfit Stone has been spending money like a drunken sailor building state of the art facilities and new equipment with no implementation on how to use them." And it gets worse, and coherently, not in a "flaming" manner or crudely. Another, with a tell-tale user name, comments: "This is what happens when you have neanderthals running a company. I have never worked with a bigger group of folks who are short on intelligence and big on ego and arrogance."


- Jonny O