Do you trust management or notLast earnings call, the insiders said they're done cashing out using company money, said they're committed to growing their family legacy and not selling any more of their shares. The question is if you trust the management team to keep their word. The market clearly does not and probably prefers a special dividend. Maybe some large shareholders felt left out, they would probably prefer seeing a big chunk of cash instead of an EPS increase. Maybe the selling is just from bitterness. If these early buyers got in at 1-2$ a share, they couldn't care less if selling this stock down to 5$, they'd still be in the green.
I think the one and only trigger for the pullback has nothing to do with the underlying business, but rather the Canadian government with the capital tax. The major risk of this company and many other successful ones is the Canadian taxes. Why work so hard to innovate and make $$$ if almost all your profits go to the government. I speculate that with the exploding share price and the elevated tax and 2 decades of stagnation, the board decided to reward themselves for their hard work before the government can harvest. And this move sent the stock price spiraling down. If I was a loyal shareholder for a decade holding through the tough times and getting impatient, I can understand the frustration with the insider move.
The reality is the Paschini family is in full control of any decision happening in the company. Even after converting and selling a 2M+ of their voting shares, they still own 12M voting shares and have over 87% voting rights on decisions. So going forward, it's either you trust the Paschinis or you don't. Retail and institutions are competing for 17.7M common shares. In hindsight, with a large shareholder (over 10%) seemingly exiting their position in a stock with zero analyst coverage and no media attention, it's easy to see why the stock is plunging. This downward pressure is shaking off weak hands, causing even more selling. And this is after the initial pullback right after earnings from the government capital gains tax, which probably led to many early investors locking in all or part their gains.
All in all, I know where I stand. I'll keep holding or buying the stock unless the management team doesn't keep their word without any explanation or unless the government increases taxes to 100%. The business didn't change. Workers still working, steel still being fabricated. Backlog is still healthy. The automation is still automatic. Trump isn't gonna shut down the factories. Society is always advancing in North America, technology improvements require infrastructure upgrades and a lot of custom steel structures will be involved. I'm grateful for what this stock has taught me about investing. All is good.