Nov. 20 at 3:34 AM
$MERC from Deep Value Report -
"Mercer International remains a company built on pulp, timber, renewable energy and industrial land. These are large, expensive, irreplaceable industrial assets that normally anchor valuation. Today the market is pricing Mercer as if these assets are collapsing or permanently impaired. What is actually happening is far simpler: pulp prices have fallen into the low end of the cycle, interest costs are high, and one quarter of operational issues amplified the downturn. This pressure destroys short-term profitability, but it does not erase the long-term value of the asset base.
The question today is not whether Mercer is profitable. It is not. The question is whether Mercer can survive the current pricing environment long enough for pulp markets to normalize. If it survives, the asset value matters. If it does not, equity shrinks. Everything in the Q3 update revolves around survival, liquidity and the timing of the cycle."
