Follow Up Yesterday I posted here about my concerns re MMT’s vulnerability to take out and there was next to no comment? I am surprised seeing as how well versed this board is. Following is a link to the post I placed yesterday.
https://www.stockhouse.com/Bullboards/MessageDetail.aspx?p=0&m=31072939&l=0&r=0&s=MMT&t=LIST
There was one response – thanks Justforfun7 who confirmed that there are no large blocks held by any one entity and that the stock is loosely held.
Bottom line is that we badly need a dividend just to shore up our share price – otherwise MMT is vulnerable to a low priced take out or at the very least – any entity could easily acquire a very large “control” position if we don’t declare a dividend shortly in order to shore up our ridiculously low share price – we are arguably trading at earnings once you back out our cash on hand and look just at our current enterprise value.
Keep in mind that even though we are trading at or near earnings – we are receiving absolutely nothing for the recent 11,700 bopd UMU9 well, which still requires tie-in infrastructure.
To make my point – consider the announcement today by High Arctic – T.HWO. They announced their first dividend that only worked out to 1 cent per month or about an 8% yield and the stock skyrockets!
Another case in point is the gold producer T.SAM (by far and away my largest holding). Six months ago they announced that come 2013, 50% of their earnings will go to shareholders in the form of a dividend. This is precisely why the stock has done so well and held up during this recent massacre.
Also from an operational prospective – when you look at MMT’s development and drilling expenses going forward – now that their cash flow has become enormous – they will have way more cash flowing in than what is needed for Cap-x. I am also not a personal fan of them moving into other areas of Nigeria – I mean if that were the case – they would be better off to spin Umusadege into a pure play seeing as how large it is and how much larger it will be once they have finished all of the exploration drilling and then just concentrate on development drilling once the newly proposed pipeline is finished.
As I live in Greater Vancouver, I most probably won’t be attending the MMT AGM on June 28th, but I would hope that anyone who does attend will bring this up and also ask about possible vulnerability to a takeout or large strategic block acquisition.
Hang in there longs!
Jandd