RE:its bad but lets not lose our heads here
Last year, practically same time (mid March) Bankers Petroleum was taken over by the Chinese guys. BNK-solid company with great management team. Got in trouble with the Albanian authorities over writing off capital expenses. Before the conflict with the Albanians the company was approached by the Chinese guys several times but the offers were rejected as very low valuations. At that time the stock traded at ~$3-$3.50 . After the Albanian authorities started their attack the stock plunged to ~$0.60-$0.90 and stayed there for several months. In mid March the Chinese showed up again and offered $2.20. As Warren Buffett said , the best thing is when a good company gets into a temporary trouble. Some guys there stayed with the company when the SP was $7+. I had a small position before the drop but got a lot below $1. I was satisfied with the outcome but I can't say the same about many other devoted investors who bought in on the way up from $2.50 to $7. Did the whole thing look like conspiracy ? May be yes, may be no. Macro economical factors, like dropping oil prices were the factor, yes. Albanian bureaucrats was another, probably bigger, one. All together, and a good company goes for a half of its price. I'm not writing memoirs here. Just see some similarities here. Look at Primero mining, one of the former favorites of the media. Almost at the same time as we were awarded with that NR about the dividend cut they issued a report about COMPLETE production stoppage at their main mine San Dimas in Mexico due to the union strike. Yet, the stock dropped around 35%. With the mine shut and , according to the CEO, negotiations to continue for several more weeks. Nevsun dropped 25% or more on what? Saving cash for exploration? Bisha is operating, drill rigs are working at Timok. All the results so far are fantastic. Probably, too fantastic. So, why not depress the SP for some time, say 20days trailing average and offer a premium of 35%-50% . I guess 35% would be more appropriate since it gives the exact valuation of what the NR stated when the whole s#@t started: Strategic US$1.1 billion combination creates a diversified mid-tier base metals company. The stock is played. If it wasn't the SP wouldn't stay that low for long. For now it is drifting down to some level where the interested party will say, OK, I'm the white knight , I'll set you free and give you the price for your shares so you'll be happy to be break even.