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Bullboard - Stock Discussion Forum Gear Energy Ltd T.GXE

Alternate Symbol(s):  GENGF

Gear Energy Ltd. is an oil-focused exploration and production company. The Company carries on the business of acquiring, developing and holding interests in petroleum and natural gas properties and assets. Its operations are located in three core areas: Lloydminster Heavy Oil, Central Alberta Light/Medium Oil and Southeast Saskatchewan. The Company is also engaged in focused on improving oil... see more

TSX:GXE - Post Discussion

Gear Energy Ltd > The big unknown
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Post by tylerreddick on Dec 18, 2024 10:35am

The big unknown

The big unknown is just how much cash will Newco get?
The presentation uses $20 million, reflecting total transaction costs and debt repayment at $10 million. 
But is that realistic, considering GXE had $15 million in debt alone last quarter?
What if Newco only gets $10 million, or less? That would change the equation drastically.

Until GXE puts out the full information circular on the transaction, anyone buying today is doing so with only partial and questionable information.

I had actually considered buying some today, but then gave my head a shake. Why would I buy without knowing exactly what I was getting, and why would I buy knowing I will be forced to take shares in a company run by the same folks who destroyed GXE's share price.
Comment by Roscoe747 on Dec 18, 2024 10:51am
IMO, with a 35 mil credit line and negligible cash, Newco is just one bad well away from a 2 cent stock with an unsupportable debt load. Newco will open at $2, drop to a buck and wither away on missed guidance and unexpected exploration costs coupled with high corporate costs.
Comment by tylerreddick on Dec 18, 2024 12:48pm
Roscoe, there is a ZERO chance that Newco opens anywhere near $2.  Bagholders will be lucky if it opens much higher than one dollar. And what happens when even more people sell into a lack of interest?
Comment by Roscoe747 on Dec 19, 2024 11:53am
Yeah, thats what I meant. Poor choice of words. The SP of Newco. Will drop like a stone on opening.  The only redeeming feature of Gear is its long life heavy assets. Mediocre assets.  I think  Gilmore quit because he has too much integrity to front this stinker. 
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