Heads up ENS is now trading at more than a 10% discount to the NAV. Silly.
I'm thinking about gettting a hazmat suit on and heading over to the cesspool also known as the ENB page of Stockhouse to shed a little insight. IF, and it is a big IF the 500 or so ENB shareholders that follow that site anonymously because of the stench do pay actually ttention, ENS might see a little love.
On another topic, Experienced mentioned the possibility of Middlefield buying back call options to offset sales of covered calls that they had made previously. That was an intelligent observation made by a seasoned pro.
Under normal circumstances, I would agree with Experienced as the premium on the calls deteriorates over time which typically favours the seller of the calls. However, depending upon the strike price of the calls and the premium received, Middlefield could be on the wrong side of the ledger if the share price has moved up more than Middlefield expected.
This is where it gets a bit tricky as Middlefield won't want to take a hit on the deal when it can simply use the ATM available via a prospectus that has been previuously filed. In essence, Middlefield and other fund managers that offer Splits can now play the game from both ends. By that, I means that they can do a public offering if the Premium allows for a Raise without harming the NAV, or, they can sell calls to rake in premiums and if they get caught with their pants down (ie the share price moves up and the calls get exercised or the buyback via shares or purchasing new calls to flatten the position put Middlefield into a losing position on the trade, they can always resort to an ATM issue where we pay the cost of the freight bails out Middlefield)
I have been wondering how the Split fund managers would find the next loophole when investors finally smartened up and stopped playing. This might be the answer.
So, how does this work out for the retail shareholders of ENS? I don't know how much the retail investor ends up paying in fees for an ATM issue but you can rest assured it is us that is taking it on the chin. I will be taking a look at the 2024 annual report for clues when it becomes available