Don’t Split Stock on WeaknessYou may want to split if share price begins to soar as these projects move into production. It’s hard for the market to ignore huge profits. You don’t have to split at all. If you do split, you want share price to keep rising, not continue it’s descent into the netherworld.
At this point the Company does not require any further share dilution. There is a massive cash balance on hand. RF chose to handle long term cash needs in a single move at $3.68 CAD, instead of risking multiple small placements. Those same Chinese partners can also arrange debt financing for construction. From a medium to long term perspective, a split now would do little to protect shareholder value.
One comment on the current stock market malaise. My own opinion is that it isn’t good for the stock market to rise too far too fast. It’s preferable to have average slow steady growth over time. That better reflects underlying economic reality. Economies don’t grow by 20% a year, so why should the stock market? The key indicator for us is metals prices, not the S&P. As long as these remain strong, we’re in good shape going forward.