Post by
jameske on Aug 04, 2024 6:30am
Dividend policy to alter the profile of volume in ABI
The reason why the stock will not rise despite a lot of positive news is that dilution and low volume mean it simply cannot begin to make moves.
If management want to show success in the share price they need to address the volume issue. Since promotion is already a feature of their output on that front, then there is one sure fire way to change the characteristics of volume if promotion is already engaged. If you cannot increase bulk volume then you can alter the dynamics of buyers to sellers of the stock in the near term.
A dividend policy (when in profit) for share holders would encourage them to hold shares and refuse to release them at around 4 to 5 cents. If you are expecting decent profits relatively near term, and you are prepared to release a decent fraction of those profits to the share holders then they aren't going to release those shares when there is at least the potential for 7 years of payouts, and especially if those payouts would be many times larger than the current value of the stock. Indeed, it would seem with small companies, giving directly from profits as a policy is a better way in the era of ETFs to reward share holders.
What would happen with a dividend policy is that share holders would cease selling, forcing buyers to offer higher prices. In addition, many investors seek regular payouts and look for dividend stocks at value to add to their portfolios. Since we currently do not offer a dividend as company policy, this source of share demand is absent in the volume profile.
Pascal Hamelin must privately have some sort of expectation of the future profits from projections of future mine output and gold prices, and so ought to be able to come up with some sort of dividend policy that would allow continual development of mine life and other gold projects whilst rewarding the share holders for their faith and continued investment in Abcourt Mines.
Pascal could use the next AGM to introduce such a policy. A dividend as company policy for profit sharing with the share holders is a source of share demand that is currently absent in the volume profile.