Gamehost Inc T.GH

NCIB vs Dividends

[BarstoolSage]

Ran some numbers based on plans to buy back about 1mm shares to see the effects on key shareholders, being me, insitutions and the Wills. 

									dollars	return
me	10000	0.000444444	$              79,500.00		10000	0.00046512	$              83,197.67	0.00002067	$                3,697.67	$                     0.05
institutions	2904750	0.1291	$      23,092,762.50		2904750	0.13510465	$     24,166,844.48	0.00600465	$       1,074,081.98	$                     0.05
wills	7537500	0.335	$      59,923,125.00		7537500	0.3505814	$     62,710,247.09	0.01558140	$       2,787,122.09	$                     0.05
float	12047750	0.535455556	$      95,779,612.50		11047750	0.51384884	$     91,914,710.76	-0.02160672	-$       3,864,901.74
	22500000		178875000		21500000		178875000		$                             -
	Osshares		MarketCap		Osshares		MarketCap

If the plan to redeem 1mm in shares is successful, that is a 5% return to all shareholders, so just about the current dividend yield, and can be seen as the other half of our desired dividend.

Would rather have cash but ...that is another posting :)

The other interesting result is a magnified result in percentage of the company held by Wills and the institutions because they start wih significant postions....

The Wills earn 1.55% more of the company, institutions about .6%, while I barely register. Totally the result result of the numbers and amounts invested and not unfair by any measure, but it is a significantly RELATIVELY more favourable outcome for insiders and it is something that can creep forward and should be considered. Combined, it earns the insiders 2.15% more of the company when the float is reduced by 1mm shares

[BarstoolSage]

Retrying resized table                   dollars return me 10000 0.000444444  $            79,500.00  

[cpeczek]

Great work, they are doing both so you get best of both worlds. There is often days where do few shares are traded that they can't make near their daily target. But they are getting rid of 20-40k shares per month. If they average 30k, it will probably be around 360k shares per year barring any large shareholder exits like we saw twice last year.

[BarstoolSage]

Sedi shows about 80k cancelled in last 4 months so your estimate works for me.   Don't mean to quibble but it could be on the high side as July saw 13.4k cancelled, Aug 14.5k, Sept 33K  and October so far 20K shares have been cancelled.

[BarstoolSage]

Current float is 22,500,000 Point where the Wills ands the institutional investors begin to own more than 50% of the company...20,884,500 that is achieved after 1615500 shares are cancelled Just wondering what shareholders feel about that I see that "strong inside position" is desirable to some, but inside control is another matter. Note I am not saying "the sky is falling"

[cpeczek]

I already see this company as running effectively as a private company. They are not trying to court new investment, they don't need to sell new shares so its in a unique position.  I see one of three things happening: 1. Management buyout/privatization  2. Sell out to a bigger casino company 3. Sell out to a private equity firm.  The first assumes that the Wills want to keep

[malx1]

Sage. Trying to get a handle on your concern or possible multiple concerns. They are all valid but maybe not as pressing if we can talk them over with fellow shareholders. Is it the allocation of cash flow used to buy back shares or is it the number of shares held by insiders?  Or both? If we can agree what all shareholders benefit equally from NCIB share cancellations, then it sounds

[BarstoolSage]

Wow thanks for such an indepth response Malx. Last first, slots are simply not negotiable. Preying black boxes with moving parts just making noise to me. Walking by them on my way to the relatively quiet table games area is among my favourite activities there. To the creeping control  it was not so much an issue as an observation of the results, and the multiple percentage increase in

[malx1]

Glad to share.  Good discussion. Certainly see your perspective and it's great you brought forward possible hazards. Let's chat tomorrow about a comfortable payout ratio and sustainable dividend rate. I'll say right now the way to not disappoint shareholders is to ensure that the annual dividend level is sustainable through economic downturns.  Downturns are inevitable so

[malx1]

There was a time when I felt similarly about slots but that changed as I came to appreciate the evolution of the old "one-armed bandits" to what we see today.  Modern slot machines are sophisticated, private lottery terminals, with all the graphics, music, sounds and even tactile interaction during game play that captivates players, making their experience enjoyable win or lose