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Silver Wheaton Corp. Message Board

  • dbtunr dbtunr Feb 6, 2013 2:01 PM Flag

    When silver tanked a few years back

    I know many of you are new to SLW and silver/gold, so here's a little history. SLW made some good deals early on. the stock took off and so did silver. Then they borrowed money to do more deals that were a little expensive. Lo and behold, silver took a nosedive and the company was in danger of not being able to pay it's interest payments. the stock went down to $2.50 or so. They had to give away stock and warrants at really low share prices to get out from under their debt.

    Trees don't grow to the sky. this deal is risky. If it doesn't work out, the bankers, I mean the current management team, will walk away or dilute the heck out of the company. there is a lot more risk borrowing money and paying "high" prices now than there was just a few years ago.

    A more prudent way to do this would have been to pay with existing cash and cash flow. they could have done that by doing a smaller deal. they chose to risk your money as they have to justify their existence.

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    • Precious metal investing is risky. Obviously, the company thinks the price of gold and silver are on the rise long term. $400 per oz gold is cheap now and will be real cheap 3-5 years from now. Average cost to mine gold is around $1400 per oz. I agree with Jim Sinclair that gold is moving towards the money system, not away from it. This new stream will pay very well for many years to come. Keep in mind that Randy Smallwood has stated a goal for zero cash on hand.

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