Strategic & Financial Arguments(TM)

for the pulp and paper industry worldwide

August 2015

Participating as industry experts in pulp and paper financing and M & A deals around the world for over two decades, we continue to see the same mistakes made over and over. This newsletter is designed to help you avoid costly mistakes we have seen others make. We will be giving you one or two points each month to help improve your performance.

Verso and Apple--same problem?

What is the future?

A few weeks ago, Apple (NASDAQ: APPL) reported record earnings. The stock price immediately tanked, for investors could not see any future upside.

In late 2013, Verso (NYSE: VRS) was in danger of being delisted by the New York Stock Exchange for being unable to maintain a stock price above $1 per share. Then, Verso did something interesting--the guppy swallowed the whale. Verso acquired NewPage.

Throughout 2014, as this drama played out, Verso was able to record a stock price that ranged nominally between $2 and $3 per share.

However, since January of this year, it has been all downhill--Verso is nominally $0.40 per share as this is being written.

Verso's quarterly report, issued on 11 Aug 15, tells the story. No doubt the reader's of this newsletter have already studied it.

What is not in Verso's quarterly report is an answer to this question: what is the future of the printing and writing grades of paper that Verso manufactures? When will we finally reach the lowest sustainable and supportable rate of consumption of these grades?

It appears we are not there yet, even after two decades of contraction.

If you have a casual question or a major deal, call me on my personal cell phone - 404-822-3412 or email me at jthompson@taii.com. We are here to help.

Sincerely,

Jim Thompson, CEO
Talo Analytic International, Inc.

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