I have a bunch of those as well. Like fitty said this is better than it looks. CDE will be a good investment and we will still have spinco as well. I am convinced our management did the best it could in these circumstances. Without the ability to raise capital to weather the storm they were forced to make a move.
Thats like saying the pos rusty truck on the corner is only worth 100 because that was a available that day. The truck has a minimum value... does it run? 2,000 is it just scrap? 500. The scrap value of this company is more than .68/share
I don't know either of you, but I have started to trim holdings in AYR and used the proceeds to build a position at FLY as well. I don't know much about FLY management but if the company is run poorly someone will just buy it or they will figure it out... either way it goes up.
Gold... I guess I lose. I had recently purchased shares in PZG and now they have been bought by CDE with shares. So now I hold both CDE and AUQ.
They definitely need the cash and your options are what they will do with it. A couple small scale strategic drilling projects to increase/maintain production and if that isn't in the cards pay down debt... or hold cash its credit is truly that bad. Stock buy back isn't going to happen. Historically speaking companies buy their stock back when it is increasing in price, which only helps the execs.
I don't mean to speak for buyoutmaster, but pwe oil is cheap. Cut capex and let the oil pump, maybe sell additional assets to maintain divi and wait for the next cycle. Pure and simple. I am sure folks like Ohio wouldn't appreciate my simplicity but such is the gift of wisdom with age. This has happened before... and will happen again. Buy now... Sell later.
I know the answer to this... There has been a long term buyer of AYR for the last year. You can see them buying the entire year.
The only other difference is that FLY made a misstep with management and capital raising that scared some investors.
It is the only difference. You should own both of these and add to the position that is most advantageous. I am an old GLS owner and sold when they merged. I bought AYR at 15 and started a position in FLY at 11.86. These are all great companies own several.
Baxter purchased their stake based on the valuation of 11.39 I believe. It also happened a couple weeks ago when the price was a little higher, that valuation was still above market at the time it happened. Why? because its worth A LOT more and everyone/ most people know it, especially Baxter.
Simple. If you told them in advance they would have gone SUPER short and made a ton. This catches them off guard.
For longs. News Flash... The company needs millions to roll out the drug. What did you think they were going to use to manufacture and release the new product? the 20 mill from baxter? That isn't anywhere near enough... this is big business and it cost money... apparently 55 mill. Don't worry about it add to your position below 10 and wait for pay day.
Positive. Remember baxter is in at 11 and change... its worth more than baxter paid.
oil and gas prices are both depressed. The company needs to conserve cash (flat capex) and sell whatever oil and gas it pumps to keep the lights on until the market changes... Everyone is slashing capex so start the cycle of limiting supply which will raise prices.
The alternative would be flat production and stupid ridiculous capex spending... which is what it has been doing for years and why the stock price sucks. The blew that capex budget on #$%$ that didn't work. I don't know what they were thinking. I like this approach better. You should be building a position here for the next wave of the cycle.
You can always tell which one they are exiting. Its the one thats name is changing. Baxter will live on. At some point in the future Baxalta will merge with some other company and get a better name... but really could it have a worse name?
No one is going to buy a falling knife. They will just wait for them to run out of cash and steal it.
I don't know based on the history of CDE shareholder friendliness... I would go with AUQ... How much worse could it be than ridiculous dilution and reverse splits?
I am an X Baxter employee.
They are splitting the lower margin but high cash flow Medical Products Division away from the the high margin high investment medical device division. Company one will throw off tons of cash while company two innovates the next generation of whatever with a high chance of capital gains. It is exactly the same thing that Abbott has done over the last couple of years.
Anyone want to talk about this, look pretty sweet to me. I love it when a plan comes together. Auq dumped the high cost and most underground mines to shrink at just the right time. Now they have YD humming a long and with the cash they buy up some assets on the cheap and wait for the next cycle.
This why you should be in more than one lessor in your portfolio. When one goes gangbusters and another lags you sell high and buy low. You get yield both ways plus you can play gains of the stock price. Thats how I ended up here. AYR is way up, I didn't sell any, however, when I had more capital to deploy I picked FLY in the high 11s. Easy money. This stock is a buy through 15... above that it starts to matter how they report.