RE: Reality Check: If the Vote Fails **The following is not investment advice, just a personal opinion**
Strange you feel the need to say this. Everything here is just personal opinion. Do you think anybody is going to take your advice as anything but?
I've been waiting for somebody, anybody (even somebody who just joined stockhouse recently), to try to make the case for voting yes to the asset sales.
You talk about "most likely scenarios" as if you have put some careful thought into this and have some kind of advanced insight into the outcomes. The summary of your thinking is that the shareholders will get zero unless the asset sales are passed. This is exactly the threat that management has been trying to communicate to shareholders, to coerce shareholders into voting yes. You are ignoring or dismissing key facts: (1) the decisions made to cause this situation (2) the strong possibility of a bid for the assets or company once the asset sales and their constraints on the board are rejected.
Key point: is AngloGold the only one who wants a operation producing 80,000 oz of gold at $600/oz cost with a lifetime of 15 years? MWS should produce without much risk $1.2B in total cash (not discounted) if the price of gold stays at $1600. It's worth a lot more to Anglo than just $330M.
Next, you state: "As far as I know, shareholders don't get to vote in a bankruptcy process."
Uh, yes, they do. It's also called bankruptcy protection and it can be sought by companies voluntarily. But anyway, if the mining rights are going to disappear, you can bet somebody will step up to the plate to buy FIU to avoid that. Even the debenture and note holders will lose if that happens. If dilution is actually going to happen, you can bet that it will happen to the benefit of existing shareholders rather than otherwise. I've seen 20M+ shares trade in a day. How does that affect the "weighted average trading" price setting mechanism of the debenture conversion. If the daily average trading price is 0.08, then so be it. Shareholders are just being stupid.
Why would Waterpan be telling shareholders that they can only bid for the company once the asset sales are defeated? Maybe because they simply want to be strategic and not get into a bidding war with AngloGold when they have the benefit of the support of the BOARD. Seems to me we are caught in a high stakes poker game. Your prediction for Waterpan to not be able to finance the acquistion of FIU might even be true, but more likely given the vendatta the board has against non-insider shareholders (those of us not getting a major benefit from the asset sales) it will very likely also be true that shareholders will see nothing more then the current market price for their shares.
When it becomes apparent that they don't have the money, they will most likely put forward a half-baked proposal with little or no money behind it, intended to persuade shareholders to vote down the deal so that they can put forward more half-baked proposals with no risk whatsoever to them.
Maybe this is true. But the corner that the BOARD has put the shareholders in appears to be a very bad place to be. The threat of getting zero appears to be caused by the BOARD, not the natural outcome of owning valuable mines and operations. I think things will look much better for shareholders once the asset sales are voted down.
Whatever Waterpan says in its press releases, just remember, they don't have any skin in the game. What do they lose by putting out press releases? If the vote fails and the stock goes to zero, they aren't going to be the ones at risk of losing money.
Hi-lar-ious. Does the BOARD have any skin in the game? Do you? Who the **** are you to be saying somebody doesn't have skin in the game!?
3. What Anglo will do:
I believe nothing. Because They have no incentive to. Yes, they want to own the asset,
Ha, you are contradicting yourself here. If MWS is for sale to anybody, and it goes for less than Anglo wants to pay now, then why did the BOARD try so hard to stop this from happening? Are they looking out for shareholders, or trying to sell a valuable asset to an insider for less then market value? I wonder which one it is. If shareholders could trust the BOARD this wouldn't even be a question. Without trust, I guess I'll vote against the crony BOARD.
4. Olma, Sprott, etc:
I believe that these folks are voting against this deal because the risk of losing all their money in this investment is not material to them. ...
That is the stupidest thing I've heard in the long time.
5. ISS, Glass Lewis, Kingsdale; this is the way it works:
I can't believe you would try to defend ISS, Glass Lewis, Kingsdale. These guys are providing a paid for opinion. Since you decided to say this, I think, with near certainty, that you are putting that BOARD's opinion here for the benefit of the BOARD. The BOARD of DIRECTORS of FIU have hardly any skin in this game.
I don't work for the company or any of the acquiring companies or any of their advisers.
Maybe, but you certainly are full of the same information as the BOARD.