GREY:GPLDF - Post by User
Comment by
Heywood_Silverson Sep 09, 2022 2:53pm
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Post# 34952898
RE:RE:RE:OTC here we come......
RE:RE:RE:OTC here we come......Agreed, as some investors may not know, there are multiple forms of bankruptcy. The only real death knell for a company would be full liquidation or Chapter 7 bankruptcy. Even in such a case, the assets are sold off and any remaining proceeds after paying off creditors are divvied up amongst the common shareholders.
GPL is potentially undergoing a "soft Bankruptcy" or Chapter 11. This makes perfect sense if you review their Balance Sheet: They have 75 million in net worth, which divided by 47 million outstanding shares is $1.59 per share of net worth. Meanwhile, the shares are trading around 25 cents a share. Yeah, this could be a GREAT speculative buy at these levels.
Let's say, worst case scenario, they have to liquidate their assets for 30 cents on the dollar, that would equate to about 48 cents a share left over for common shareholders, which is double what the price is trading for today! No, a white knight would step up beforehand and get the assets on the cheap if it came to that.
Short term, they face a working capital crunch (due in part to lowered metal prices) and do need some time to restructure their debt payments via Chapter 11. Long term, with improved metal prices and (I hope) a slimmed down management structure, GPL can regain profitability.