RE:Dead stockRakaposhi wrote: It's curtains for CHW. My ACB is $11 or so. They misled investors twice in a few months. First boasting they had ample room to manoeuvre, then a dividend cut nonetheless, now a total cancellation. The language also does not hint at even trying to get back to paying. I'd say $2 bucks and sold to the lowest bidder. Large insider holdings does not mean a company is well run.
They did say that liquidities were enough to pursue operations, but they also said that their calcs didn't include funding new business.
It looks like their creditors weren't willing to let them draw funds for new business while they still paid a dividend, so they suspended the dividend. Otherwise, they'd have to stop new business. Between the two, they likely judged that in the long run it was preferable to keep on lending. This bit from the last news release likely explains the new cut:
"
New Business Funding Pawnee and Tandem temporarily halted new originations late in April while we are in the process of working with the revolving credit facility syndicate for amendments which will better address COVID-19 related experience and expectations. Once completed, we expect to resume funding new transactions once again in the U.S. (at the more modest levels contemplated in Chesswood's annual MD&A). In Canada, Blue Chip continues to fund new business under its stricter COVID-19 credit guidelines."
I think it looks bad on them for cutting the dividend twice. They should have dealt with the lendors and make sure everything was tied together before announcing the first cut (to make the right call once).