OTCPK:VGIPF - Post by User
Comment by
Opportunuson Apr 09, 2013 11:45am
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Post# 21231343
RE: falling knife
RE: falling knife This is the most hated stock now. Investors hated the Queensdale deal to begin with. They thought it was done when the share price was low and the company paid too much for it. They were worried about if the divy was sustainable. When the report came out, it showed the debt associated with the deal were even higher than they thought. That opened the old woud. They hate the deal more than before now. And, the selling started before the repot was made public. That also angered many. With such sentiment, people view the selling of none core asset as a sign of desperation in need of cash. When the yield increased well above 10%, money managers are convinced that the divy is going to be cut. Analysts feel that they have to say something negative to cover their own as--- ....
The higher than expected debt was related to the deal, not to the operation. That is the most important part many are missing. The operation side is just fine. I don't think the company has to cut the divy. But they may want to do it now. With such a high yield, there is no need to keep the divy at current level anymore.