Post by
bendystock on May 03, 2016 11:10am
Thoughts and Sedar Docs Confirms New Bid Possible
All of the transaction documents have been posted on Sedar, I recommend people take a look you can get to them here:
https://www.sedar.com/DisplayProfile.do?lang=EN&issuerType=03&issuerNo=00032332
I did not read them in detail as they are lengthy legal agreements but I looked specifically for if another bid is possible. Short answer is yes the new RMC owning 100% of the upper zone is open for bidding from now until the deal with NSU closes.
NSU does have a right to try to beat out any new bids and as previously mentioned would receive the break fee, loan repayment, and any share appreciation on their ownership if they are outbid.
As for our current share price I believe that we are now based on the commodities market along with NSU. Easiest way to explain is that it is clear we now track 2x the NSU share price so best is to look at what impacts the NSU chart. If you make a chart with NSU, LUN, RIO and FCX you can see that all of these stocks move in generally the same trading pattern other than big event changes. So if you believe that LUN, RIO, or other commodity companies are moving up then NSU should continue to go with them.
As for the short sales I can't explain that and would be very interested in people's thoughts. If the site is accurate my take is it means that 1.4 million shares were shorted either on May 2 or between April 18 and May 2. My best guess is that this is related to trading firms working on arbitrage in that they short RMC and buy NSU. Maybe it is another way to short the commodity market.
For me the only downside I see from here is the commodity market going down. Typically a deal falling apart is a downside but for us I think that is an upside as we now own 100% of the upper zone so if somehow NSU backed out, good news for us especially in the long term, possibly the short term too. As for upsides there is the possibility of a bidding competition, drilling results for the lower zone, getting share of the new NSU which I think will be worth more than $5 per share even at current commodity prices, all pretty good possibilities.
If I were a trader I would be wishing I sold at $9.20 and bought back today at $8.50 howerver as an investor I am happy to own a company I think is more valuable today than yesterday despite the share price.
Just some thoughts to add to the conversation, do check out Sedar and the stock chart comparison I think both are factual and informative.