Gear Energy Ltd T.GXE

Newco assets fall to the lowest since announcement

[lovehockey]

$0.04333 per GXE share or $0.1315 per NewCo share, or $11.4 million for NewCo assets (without the cash) or $6730 per flowing barrel (1,700/boed divided by $11.4 million). This is your market answer to a complete embarassment of a deal they are offering to GXE shareholders.

[lovehockey]

$0.03833 per GXE , just for the laugh of it, hoping to see $0.41 cents, which will be less than CVE offers for Gear assets

[houbahop]

From my understanding, if half of the $0.607 is paid in cash and the other half in NewCo shares, GXE needs to trade at $0.31 to value NewCo at 0. If NewCo has 20m less 7m in transaction fees, it is left with $13m. For 40m shares, the cash component is 13m / 40m = $0.325 / Newco or $0.11 / GXE share. At $0.46 / GXE (where it trades today), NewCo assets less cash is valued at: $0.46 - $0.3035

[lovehockey]

This is the math -  very ssimple. CVE pays $110 mln for Gear assets (3700 boed). That is 0.416 per each issued GXE share. The remainder of production is NewCo assets meaning on the market right now it is valued at about $0.04 per share (264 mln shares). In theory the shares of GXE can't fall below $0.416 as that is what CVE pays unless NewCo assets have negative value. 

[houbahop]

And if you remove the cash component of NewCo ($0.11 per share), it values its oil & gas assets to negative! Amazing...

[tylerreddick]

Your math is wrong, so not quite as "amazing" as you believe.

[baranja]

it looks like Newco of 1.7 Kbpd is now  trading for 5  cents. sick  If price goes down to 41 cents,.. Newco is free.

[houbahop]

NewCo has $13m in cash after the $7m transaction fee or $0.33 per Newco shares (40m shares basis). The NewCo Oil & Gas assets are already trading negative. In other words, at $0.46 per GXE share, the buyer of GXE shares is paid to buy those assets.

[tallpaul]

houbahop. If you like the potential of new co shares then you can buy my gxe shares today for 60.7 cents. I only have 17000 so its less the 11 grand.  Then you  can ask for only new co shares when/if the deal goes through.All of this talk about the value of new co shares is irrelevant. What will determine the value of new co shares is the price that someone is going to want to pay for

[baranja]

Shareholder will have to continue to feed and support those management parasites.