RE:RE:RE:RE:RE:What's in the Q1 report?(I wasn't the one who gave you that one star.)
>> EV is net worth added to debt <<
Not true, look at the definition of EV
https://www.investopedia.com/terms/e/ "Enterprise value is calculated as the market capitalization plus debt, minority interest and preferred shares, minus total cash and cash equivalents."
So basically EV = market cap + debt - cash
since there is no preferred shares or minority interest.
It is not net worth as you say, and debt is not total liabilities.
GCM market cap is only CDN$29M or USD$21.4M
From their financial statement, long term debt is USD$88.4M. It is lower than face value because it is convertible debt and is recorded at market value in which the convertible debentures are trading at a discount, and some of it mandatory conversion. They are using an accretion method of accounting "a financial liability and have been designated at amortized cost."
So EV = USD$21.4M + USD$88.4M - USD$2.9M = USD$106.9M
It is mandatory convertible in that the company can and will most likely convert it to shares (from the end of year financial statement):
"On maturity, provided that no event of default shall have occurred and be continuing, the Company may, at its option, elect to satisfy its obligation to repay principal plus accrued and unpaid interest amounts (the “Outstanding Balance”) of the 2018 Debentures by issuing and delivering that number of common shares obtained by dividing the Outstanding Balance by $0.13. However, should the volume-weighted average trading price of the Company’s common shares traded during the 20 consecutive trading days ending five trading days prior to August 11, 2018 be below $0.13 per common share, 19% of the Outstanding Balance must be settled in cash and 81% of the Outstanding Balance may be settled, at the Company’s option, in cash or by issuing and delivering that number of common shares at $0.13 per common share."
The USD$0.13 is pre split. Multiply by 15 after the reverse split and the conversion price is US$1.95 or CDN$2.60, well above current share price.
lumpy13 wrote: ts9222: EV is net worth added to debt, which in the case of GCM totals $283m - not $110m. I don't find anywhere in their financial notes that the 2018 convertibles are mandatorily convertbile. The company is required to deposit 25% of excess cash flow into a sinking fund to buy/redeem these debentures. Otherwise, why would they be purchasing them in the market if they were at a higher price than the current market value? The company undertook a reverse 1 for 15 shares consolidation in April of this year. GCM made $3.7m in 2016, otherwise has been consistently unprofitable since 2011, taking a $165m inpairment in 2013, resulting in a $163m loss. On the face of it, there isn't much attractiveness to GCM from a financial perspective.