Trading in rights will be minimal - they expire in 21 days after issue and will not likely trade in US.
Where does the $11 number come from - don't see any post unless it is on my ignore list.
May hold at $6 because of BAM support because of 5.97 right exercise price. But even at $11 that makes the current stock worth .0275.
They have shed $150/oz in interest cost but Pd has dropped $150 so a wash. Financially they are back where they started and still have financial problems.
Q2 will be a disaster because mill shut all June. Q3 may look good because of crushed ore stockpile whose major cost was incurred in Q2 and temporarily high mill TPD. Q4 may provide some clean visibility if we ever see a Q4 report. At current prices (390M x .03 x .08 = about $1M) BAM can buy ou t6% db and 2% remaining stockholders, go private and we will never see or hear from them again. They will easily save that $1M in exchange listing,reporting and auditor fees.
Not sure of the strategy of announcing a huge loss the day before the re-org meeting and issuance and trading of new NAP.
This will one interesting and strange re-org.
???? Gold is less than 1% of their revenue. Their bread and butter,Pt and Pd, have declined much more than gold.
In the past 12 months
Pd down 27%
Pt down 33%
Au down 15%
So down 15% in 1% of their revenue is insignificant.
From "Circle UP"
Investments in small, innovative food companies can be quite lucrative. These firms have attracted the attention of larger Consumer Packaged Goods (CPG) organizations that are on a quest for innovation, and paying substantial multiples to get it.
The importance of innovation (and revenue growth), combined with the substantial supply chain synergies that result from these mergers, have pushed purchase multiples in some transactions to ~20x EBITDA, making investments in small companies within this industry quite attractive."
The above refer mainly to retail and I consider AMNF to be wholsale supplier to the trade. So maybe somewhere between 7x and 20x lets say 14x. 14x6.6 = 92M or 3.50/share. That is a 45% premium which seems high so lets go with 30% would be about 3.10. I would take 3.10 now rather than risk a stumble. It would also avoid my having to get out of a very overweight position. That being said understand that I am 73 and have shorter investment time horizon. In another situation I would just hold.
As far as the family or family trust I think it would have to be some tax-free exchange of stock as their basis is very low and taxes would take a big bite. All my shares are in tax free or tax deferred so no difference to me.
GLTA - Maybe we can make new high this upcoming week.
$45M would just be 1.50/share so no.
Tried to find another small public specialty foods company as a comp:
LWAY - Lifeway Foods
Mkt cap = 241M (14 x EBITDA)
There is something strange about this company and its numbers will try and look for a better comp.
As long as there are no big bids the price should hold and maybe rise. No, I'm not crazy - as long as the bid size is just 100 shares no one will risk selling any significant amount. If the bid size were 5000 a potential seller might pull the trigger. And conversely on the ask - a big ask size might induce a buyer to pull the trigger.
"My way of thinking rightly or wrongly is that both e-trade and yahoo state that PAL is one of two major producers of palladium so they had the market kind of locked up, "
PAL is an insignificant producer of Pd. What you maybe saw was that PAL was one of the two North American producers or that PAL (and SWC) were the only two primary producers of Pd. By primary they mean PD is their primary product. But most of the world PD is produced as a byproduct of PT mining (South Africa) and nickel mining (Russia). World output is about 6M oz, PAL output about 200K so they produce only about 3% of the world annual PD. Not quite locked up.
With PD approaching $600 and byproducts following I don't see SWC in the black. That and unresolved labor issues. I anticipate earning est reductions. Under 10 is deserved.
They have 4.50/share in cash and 2.50/share in low interest debt. At what point does SWC become attractive to a major or a hedge fund?
"Isn't the board of directors of a company suppose to provide some kind of guidance
before a company gets in a financial nightmare?"
I don't have any idea what to make of this statement. If you are serious what rock have you been living under?
Or else my sense of sarcasm is waning.
From 2014 report
Income before taxes and D/A 6.046M (includes 97K in interest earned and other income and 46K in interest paid)
See page 12 of YE report on their website.
So looks like annual
EBITDA is about 6M.
Q1 was about 1.57M
Q2 financials usually reported on their website in a couple of weeks.
I would be very happy with 2.75 by YE. Have been selling some because much too overweight and sales fund my RMD in my IRA. Still have over 124K.
I am confused by the word "purchase". The rights are free to existing stockholders. Does that mean they must/will exercise their rights at 5.97 which will be just about $50M?
From SEC filing"
"on the rights issuance date, each holder of New Common Shares will receive, for each New Common Share held, one (1) right to subscribe for 0.1693 New Common Shares (the “ Rights ”) at a subscription price of $5.97 per New Common Share (the “ Rights
Offering ”); "
No mention of having to pay for the rights.
Description of the Rights from filing
Each Right entitles the holder thereof to subscribe for 0.1693 New Common Shares, such that a holder may exercise 5.91 Rights to purchase one (1) New Common Share for the Subscription Price prior to the Rights Expiry Time.
A holder of Rights who has exercised in full its Basic Subscription Privilege may subscribepro rata for additional whole New Common Shares, if available, at the Subscription Price. Those additional whole New Common Shares will be allocated from those New
Common Shares, if any, available as a result of Rights that are unexercised at the Rights Expiry Time. If not exercised, the Rights shall expire no later than 5:00 p.m. (Toronto time) on the **** 21 st calendar day following the Rights Issuance Date****.
I guess the bean counters concluded that new NAP easily trades above 5.97 so they can exercise and sell or sell the rights in open market. Will there be a market for just 21 days? But what if new NAP trades at $4? It's like they are giving you a 21 day option at 5.97 but you don't know the price of the stock. New NAP would have to trade at $12 to make the current stock worth .03.
"Assuming the true valuation is somewhere in-between, then shareholders will have the "right" to purchase a stock at a higher value than it's worth (though, still half what it's trading today). Yippy! "
But I thought the rights offering was to raise $50M to repay the $25M bridge and provide some working capital. But if new NAP trading below the rights price of 5.97 why would stockholders (principally BAM) exercise the rights? And if BAM doesn't exercise where does the money come from to repay BAM (A bit circular). If trade is well below 5.87 does BAM just put $50M into NAP, take $25M repayment out and leave the other $25M as working capital and just sit on the rights and hope. Puzzled.
In Q1 2015 , they lost 15M (ex-FX loss) when PD average for the qtr was 786.
Now about $150/oz of BAM interest has been removed but PD now is 636 - $150 lower.
Q2 will be a massive loss because mill down all of June and PD lower (756 avg)
Q3 is problematical - PD likely way down for the qtr offset by higher volume from ore stockpile.
Even the new and improved NAP seems quite a risk.
As I read the tea leaves, there is a band of support around 580-620. Getting close to that. As irrational as it sounds, if 580 or so doesn't hold, 400 is not impossible. Note that is just tea leaf reading not and supply/demand analysis - you know my feelings there.