RE:RE:RE:RE:RE:RE:RE:RE:RE:At $0.42 now because: TSX is in rage again at red colorSP dropped after Alstom acquisition if Bombardier rail was announced because 1st) the market thought the deal will not be approved by EU just like Alstom-siemens merger and before that the talks between Bombardier ans Siemens to tie up. Few differences this time around. Its not a merger its and acquisition, both Bombardier and Alstom are willing to sell units to make this deal work. In Siemens and alstom merger talks Siemens refuse to negotiate further with EU and broke off from deal. Since Alstom-siemens merger talks the world has changed alot thanks to USA most countries are more protective of their home industry and EU is more willing now then before. 2nd if the deal doesnt go thru then what is Bombardier going to do to address the debt as nothing else is left to sell. They could sell aviation and keep rail but that changed the family plan. With alstom and bombardier deal looking like more likely to go thru their is less chance Bombardier will be looked thru same lense as when deal was announced. Also if the deal doesn't go thru then bombardier can spin off rail divsion as stand alone company with its own debt etc. Or each bombardier rail divsion could be sold to Siemens and Alstom piece by piece.
pierrelebel wrote:
johnney wrote "...like you say, no profits, and their still paying high interest on their debt, this is the reason why we are at $0.42, that's what the market evaluates the SP, if it wouldn't be the case, we would be much higher!"
That is one valid perspective.
On the other hand that was true five months ago when the shares were trading at $1.65 (Friday February 14, 2020).
Then, the following Monday, Bombardier announced the sale of BT to Alstom (for net proceeds of about $4-4.5 billions) to pay down the debt and the shares quickly dropped 70% and have remained at current level since then.
So, in my opinion, the sale of BT is responsible for the current price.