TSXV:ART.H - Post by User
Post by
discernon Oct 22, 2009 5:58pm
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Post# 16414846
possible reason for share price drop
possible reason for share price dropAs we continue watching VST and LFD share price go down while the date for either a proposed merger or release from NIKO of resrouce estimates grows closer, I can only think of a couple of reasons.
#1 the results aren't all that good which seems contrary to all the hints dropped so far.
#2 there is increasing concern over the stability of Iraq, but specifically Iran - the nuclear threat in Iran is a real possibility, but this should have the same effect on other companies in the Kurdish reason which doesn't seem to be happening
or
#3 consolidating a lower share price so that less capital gains will be realized upon a new merger.
This is just a thought, and I am not fully aware of tax laws, but if capital gains must be applied when a value is given for shares (i.e. Longford to Vast) then it is in everyones best interest, but particulalry those who have bought in early to have a lower share price upon the conversion so that they will not need to pay capital gains upon the merger.
I did this a few years ago when I was downsizing and someone was upsizing and we ended up swapping houses. We agreed to swap at a lower value than the normal assessed one so that it saved us real estate fees, transfer fees. . . Perhaps this is part of what is going on behind the scenes