RE:RE:It's All About the NumbersOilswell...yes there is an impact on earnings but with low corporate tax rates in Canada, they still are way underwater in terms of cash to pay the dividend.
Yes, management knows this for sure but they have decided to borrow the money to pay for it. They initially said they would reduce capital expenditures to address the shortfall and then turned around and bought the US company and increased debt. These are some of the reasons for the SP tanking over the past number of months. IMO, the only solution is to cut the dividend to be more in line with their FCF. And again....until they do this the shorts will pummel the company and by extension their shareholders.