New speculation about Diebold Nixdorf's financial situation states the company is working with J.P.Morgan Chase & Co. to secure emergency funds.
New speculation about Diebold Nixdorf's financing pushed the company's stock value down again.
The stock price spiked downward following a midday report from Bloomberg that indicated J.P Morgan Chase & Co. was "shopping rescue financing" for the Green-based financial equipment company. Shares closed at $4.225 on Thursday, down 52.5 cents with more than 5.83 million shares being traded.
Diebold Nixdorf representatives declined to comment on the Bloomberg report.
It was the second time this week that national news agencies speculated on the company's need to generate cash. On Monday, CNBC said Diebold Nixdorf was working with investment bankers Credit Suisse and Evercore to find a buyer or investors.
On Thursday, Bloomberg reported that Credit Suisse was brought in to help the company sell non-core assets, while Evercore was on board to review strategic alternatives. In an earnings announcement on Aug. 1, Diebold Nixdorf said it was working to reduce costs and considering selling non-core assets.
Both national reports cite unnamed people with knowledge of the situation. Diebold Nixdorf declined to comment on either report, as have any of the banks mentioned.
Speculation has been heavy since Aug. 1 when Diebold Nixdorf reported a second quarter loss and revised its financial outlook for the years. The company is projecting a net loss — previously expected to be $75 million to $95 million — that could range from $325 million to $365 million. Because of the revised projection, the company said it was talking with its principal lenders to amend its credit agreement.
On Monday, the company said talks with lenders was progressing.
But Diebold Nixdorf still is grappling with the August 2016 merger that created the company. Slightly more than 77 percent of Wincor Nixdorf's shares were tendered when the merger took place, leaving more than 22 percent waiting to be cashed at a price of about $63 per share.
After the second quarter earnings announcement, Wincor Nixdorf shareholders exercised their rights to redeem shares and Diebold Nixdorf had to come up with $255 million to cover that cost. Diebold Nixdorf used cash and its revolving credit to cover some of the payments but still needs about $90 million.
Diebold Nixdorf stock has traded heavily since the earnings report, while the price has dropped from $11.25 per share.
During that stretch one of the company's larger investors, Mario Gabelli, has added to his holdings through different funds — the largest being GAMCO — his company controls. According to a filing Tuesday with the Securities and Exchange Commission, Gabelli's fund controlled more that 8.95 million Diebold Nixdorf shares, equal to 11.7 percent of the outstanding stock.
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