Gear Energy Ltd T.GXE

NCIB math

[lovehockey]

So ideally they need to buy about 26 million shares as part of the buyback program. It is also clear that under current conditions they can't afford more than $2mln a month towards divs and buybacks. They are paying $1.3 million a month towards the divs that only leaves perhaps $700k a month. Once buyback is on I have no doubt the price of the share will start going up. As a result of that they will not be able to buy more than 1 million shares monthly. They need to ditch the dividends and send the freed money towards the purchase of the shares unless they are happy with getting $.005 cent a share and $0.75 price.

[Roscoe747]

Considering investor sentiment on oil stocks, the price will likely stay the same. So, if GXE buys back 26mm shares per year by blowing down inventory, in 10 years they will own 100% of nothing.

[lovehockey]

You ever heard about Achilles and tortoise paradox? That is what is applied with buyback. They can never buy 100 of their stock with the current NCIB rules. But thanks for wasting my time.

[Roscoe747]

You ever hear of satire, billy-bob? "A PhD knows more and more about less and less until he knows everything about nothing" 

[w8asec]

It will be interesting to see what happens in the next few months... hopefully they only buy at cheap prices... I have the current NAV at $0.94 per share (napkin math) -  I think it will be higher at the next financials... ... A smart move might be to cancel the Div. and hope for a share price collapse to buy the daily max allowed on the cheap.... H3LL why not take advantage since this stock

[lovehockey]

This should be in management plans. Dumping divs will likely trigger some shareholders to sell and that may help buy back some discounted shares. I would say they should not do it right away but rather 2-3 months into NCIB. 

[Oldgreyguy]

It's funny how on this board the consenus is "Drop the div and give us buybacks" while other different stock boards say "Quit the buybacks and up the div".  I do find it interesting that itty bitty oil and gas stocks now pay dividends.  That is something I had never seen during my 45+ years of oil and gas investing until the last couple of years.  Growing

[lovehockey]

Dividends are usually better for long term holders and buyback for short and medium term holders. Often the companies that pay dividends don't do too great in terms of SP unless they combine divs with buyback. In Gear case as soon as they stopped buying their own shares their SP became under an attack of wash traders. What they do is they overwhelm the stock with trades that always have this

[Quintessential1]

It's funny how on this board one loner with a wash trading delusion constitutes a "consensus". Growing reserves for an underappreciated market seems counterproductive.   Milking them for all they have can be lucrative as long as you don't latch onto a dry teat. GLTY and all

[Roscoe747]

Re: "growing reserves", the devil is in the details. Growing modest reserves while keeping production flat to enhance future productivity makes more sense than growing reserves and production. We shall see the details on Wednesday.

[Quintessential1]

I'm ok with growing production and opportunistically acquiring reserves when they are in a slighty better financial position down the road as it seems like GXE's peers are stumbling in these challenging conditions and may be vulnerable.  Hard to do without cash or financial leverage. GLTY and all

[lovehockey]

So they are allowed to purchase 24 mln shares, basically 2 million every month. They will have to average 80k per day for the entire year in order to achive that. 

[Maxmoe]

Reminds me of when ATH started their NCIB buybacks. After much gnashing of teeth and wildly hysterical predictions, the stock just started plodding higher and higher. And higher.