RE: An alternative viewpoint on the buyout" 3. I have a theory... "
You know, I have another theory, if the moon is aligned with mars, the sun and venus ...
But I have news for you, I don't by stocks based on astronomical coincidences, nor do I think the guys at SLW do.
They (SLW) look for value and want to buy it cheap.
I do have value in hand (SST shares) and DON'T WANT TO SELL IT CHEAP period.
If SLW is not prepared to pay at least a fair amount for my SST shares, I'm happy to keep my shares.
No problem.
Business is business.
What I'm starting to dislike of our management is that they are increasingly appearing not willing to run this company anymore.
If you listen to the SLW conference call, you may have noticed that Peter Barnes said that Capstone asked SLW to make the Cozamin deal, but SLW wasn't interested at that time so Capstone gave birth to SST mirroring exactly what Goldcorp did when founding SLW.
Goldcorp was smart enough to sell their stake of SLW at the top of the market effectively realizing a lot of value from part of their silver (and this was one of the main reasons behind the creation of SLW, to let Goldcorp realize value from their silver).
Capstone, instead, sort of lagged behind and is now finding itself holding a stake in a low priced company that they are not interested to run.
But ... while SLW has different management from Goldcorp, SST shares the same management with Capstone, and here is the conflict of interest.
And looking at this deal from a value standpoint (not stock charts, market price, astronomy or what have you) the suspect that management is working for Capstone shareholders, not for SST shareholders, is very very high.
I would like to recall that:
(1) Managment is not looking for potential other competitive bids, they want this SLW deal at such a point that they signed a binding agreement that states they will not solicitate competitive bids.
(2) Management didn't even try to support the share price by way of starting a buyback program or distributing dividends usign cash flow that we do have.
(3) Management didn't even wait a couple of quarters to let the market see the effect on company eranings of the latest Minto deal.
Did management handle any of these three points in favor of SST shareholders?