Post by mrmoribundon Sep 28, 2023 10:11am
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CommentWow, this is one quiet board. First post in 4.5 months.
What a curious story this is. On one hand, Bay Street and private equity should just be crawling all over this. Sales approaching $300 million. EBITDA pushing $50 million. Great sounding ESG story. I cannot imagine they haven't had some outreach.
But . . . all is quiet because four insiders together control about 60 million shares--more than 50%.
17 million - 32 Degrees Capital (Trent Baker, board member)
16 million - Terry Stephenson (CEO, board member)
14.5 million - John Jason Clemett (former SVP, + hey, former lineman for Calgary Stampeders)
11.2 million - Brian Butlin (board chair)
They are in an interesting position. I could see them wanting to raise money, get Bay Street coverage, etc (i'm sure Bay Street would be happy to oblige). But probably NOT at 40 cents per share. In their shoes I'd want to let Q3 and Q4 numbers come out--which will probably be very good and could break the share price logjam, assuming anyone aside from me and suburu1 might become aware of this.
At the same time I'm sure they're mindful that someday oil might go back down to $30 and if they wait that long then they will likely regret having not acted.
One interesting clue here that might have a bearing on a potential plan of an insider buyout. From the 32 Degrees Capital website:
For us at 32 Degrees we recognized some years ago that the energy industry was changing and that our investment model that had been successful for the past 15 years was not functioning due to changing market conditions. For this reason, we decided two years ago [sic] not raise a new fund and concentrate on managing our existing portfolio to the finish line. To move 32 Degrees into its final phase was a bittersweet decision for us in that we have built not just a top performing energy fund but have established an exciting place in Calgary’s investment community. Thank you to all those great associates that have been part of this success.
They might want to fix that typo.
Looks like 32 Degrees Capital has their eye on a possible exit. Again, I'm sure, NOT at 40 cents per share.
The little quarter-end videos on Stockhouse are very nice. That's how I learned about it. But TS might sometime want to take a few days to go speak with analysts in Toronto. People with $$ to deploy WILL be interested.