RE:RE:Shorts will win on betting against Suncor When Suncor itself or anyone buys shares, they pay market prices . What they get is an entitlement to all future profits. According to the 2020 year end report, the value of proved plus probable reserves after taxes is 100 billion dollars Discounted at 10 % it is 30 billion dollars. That was at Brent price $41.65.
So today the reserves value would easily be twice as much. So take 60 billion divide by 1.5 billon and we get SP = $40.
So for less than $28 Su is buying 40$ worth of reserves. All of the downstream is on top of this as is that portion of the upstream that could be repurposed after reserves run out.
With every share that Suncor purchases, the remaining shares go up in value. We the shareholders get that extra value without any need to invest. We could have taken the dividends, but those are taxable. Also, once the dividend becomes payable , the share value goes down by an equivalent amount.
Markets are not always efficient as Suncor should be trading at its discounted NPV.
Glad to see that Suncor's management recognizes that. As for any short sellers , thank you for your contribution !!