RE:Level 2 RT/ DilutionThe sp reflects fundamental fear, rather than fundamentals of the business. It's really all about the dividend imo. The current payout is unsustainable, and with the stated aim of being a growth co, there is mounting pressure to free up this massive monthly cash outlay.
Imo, the market might be anticipating a cut to one third the current payout (3Cents per share), which seems about the highest the company can reasonably afford right now. At current sp, the yield would only be 5.2%, which is
decent perhaps, but not overly compelling, given the current crop of high yielding companies out there with yields in excess of 6%. In other words, a dividend cut cold easily lead to a greater drop in the shareprice ~ say to 6$ or less, which in the above scenario would leave us with a yield of 6% or more. Of course, this says nothing of the growth initiatives being touted by management, but without greater clarity on the business plan and the dividend especially, it seems the market is playing "wait and see".
All in all, this line of thinking makes it difficult for me to justify further investments in this stock, and perhaps that is why the bids keep dropping.
In short, I agree with the previous posters that what we need most is clarity from management about the business plan (future transactions, indeed!) and about how the dividend fits in to this plan. The sooner this is made clear, the sooner the sp can recover and start to reflect fundamentals of growth instead of fundamentals of fear.
buyvalue1 wrote:
Do you think they will do a share offering at these prices?? (speculation)
imho, I can't see how they can be both a high yeild Co and Growth Co with the US and CDN economic headwind's.
IF. MGMT is in lockdown, some sort of finacing/ re-org is in play ( funds could be use for operations or pay down debt and maybe/or a buy out of a peer)