Something to PonderHi All,
In a previous posting, I mentioned that approximately 30 million total shares (A and B combined) are held outside the hands of the Voting Trust and Fairfax. Here are some facts I have gathered:
- Since Fairfax purchased 11.8 million shares last November, 8,951,687 shares have traded. This represents about 30% of the total shares held by non-Voting Trust members or Fairfax.
- Over this time, the high was $1.88 on May 1, 2018, and the low was $.90 on November 13, 2018.
- The highest volume day was 357,226 days after the Fairfax announcement and the lowest volume was 400 shares on October 23, 2018.
- Average daily volumes over this period were 35,382.
So what conclusions might you draw from this information?
- In the past year, the average value of these shares traded is probably in the $1.20 - $1.30 range and with each passing trading day, the resistance to an offer in the $5 - $6 range gets lower and lower. Those who bought years ago at much higher prices are being flushed out as they have given up on the prospects under current management.
- As cash reserves are depleted and the company runs out of assets to sell the dividend will become more difficult to sustain. This will force the Voting Trust to come to terms with the prospects of no income and the B shareholders eventually assuming control of the company.
- Fairfax may contemplate a Dutch auction scenario wherein they start at $7/share with the Voting Trust and lower it with each passing quarter. This may force the Voting Trust to realize time is running out and they had better get out before it is too late.