RE: RE: RE: RE: something management sold for 80mi Those two knee jerk reactions from the market match what virtually all posters here are saying. Everyone else in this deal went up and Avenex went down, which clearly reflects that Avenex shareholders lost value overall in this transaction.
If you have a counter argument make it. No one has made the argument that Elbow River was only $80M of value. No one is making the argument that we got a great price. No one is making the argument that it is a good thing that shareholders were not given any benefit from the sale of its key asset.
I can't believe you let this company just ruin its primary asset, give all of its cash away in exchange for debt, and then try to dress up the acquisition as a good thing for shareholders based on the dividend. High dividends from companies like this with high debt are generally not sustainable! You are trading a 13% guaranteed dividend for a 10% dividend that is fragile and will likely decline or go away entirely.
What made Avenex interesting and unique was that Elbow River made a 14% dividend sustainable. Further, Elbow River had significant return on investment opportunities because volumes could have been grown significantly with small amounts of incremental capex. To the extent that a $1.3B company thought it could monetize the asset better than Avenex fine, they should have PAID UP. To lose such a prize asset in a market cycle where petroleum over rail is HOT for anything under 8x EBITDA is criminal. We got raped.