RE:A make-or-break week Hi PG,
I think you’re being overly dramatic with respect to foreign asset seizure in this case.
First, I think we have to give credit and the benefit of doubt to the management team here. They managed to sell an oil company in Libya. I’ll take Turkey over Libya any day of the week. In fact, Management has repeatedly stated they have good relations with Turkish authorities.
Second, Erdogan et al don’t have the technical expertise to bring Thrace forward on their own. Their economy would benefit from the gas....seizure would stall or eliminate production growth.
Third, Statoil and BG are not going to roll over.
Fourth, why would the CEO buy in the open market if he was fearful of seizure? If he’s not fearful, should we be?
VLE’s been a ten bagger for me. Hopefully, it is allowed to grow through drilling to become a 45 bagger for me like TH.to has become :)
bfw
PennyGee wrote: The financial turmoil in Turkey is partly due to Erdogan’s quirky understanding of economics, but it’s mostly due to the fact we’re in an accelerated rate-hike cycle.
That said, I think this rate-hike cycle we’re having now will be shorter than most of previous cycles and it will end abruptly with a recession.
Given the earnings trend of US companies, I think this cycle will end sometime between late 2019 and early 2020. That’s about another 1 to 2 years to go.
For people who are old enough to remember what happened in the last rate-hike cycle and the consequent emerging market financial crisis, the writing is on the wall - there are plenty of compelling reasons to worry.
As well, the fact Erdogan is decidedly moving towards Putin is not helping with Western investors’ confidence in the country.
All VLE shareholders now have to substantially discount the likelihood of the company being bought out in the near-mid term. No North American or European publicly-traded companies would want to make an announcement of a major asset purpose in Turkey in this political and economic environment - unless they are not afraid of seeing their SP tank by 5%.
During EM crises, it’s also not uncommon for authoritarian governments to seize foreign assets by force. Spend some time studying EM economic history and you will see plenty of foreign asset seizures.
This will be a week I’ll put everything else aside.
Let’s hope Cormark can put up a fight - a real, whole-hearted fight.
PG