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I’ve read all the information. And this is very different to post Senegal dividend (the India money was returned after that).
This time the company has the Senegal payment and North Sea payments, which I agree will increase the share price a bit, but I think they are already priced in (and I think the Senegal payment IS basically the £100mi additional divi payment).
Look at the Egypt operations, they require a huge amount of CAPEX, they are non operated, they are not making any money, the countries financial condition is deteriorating (I highly recommend investigating that), I predict the receivable position to worsted, look at all companies who have managed to improve it, to do so they needed massive increases in investment and/or large bonus payments be made to Egypt.
It appears your assumption is that CNE will only trade side ways or downwards. I am banking
on the stock going up in price as business's tend to do.
From a historical perspective, I was a CNE holder during the last dividend and consolidation about a 1.5 year ago. This exact same thing happened, and in roughly 14 months the stock rebounded and increased to my breakeven point of 2.40 GPB per share. I sold because I hated the old management. (not a fan of holding on to cash and not giving to shareholders... the tender was a stupid idea).
I think this stock has potential because:
- New BOD - with focus on returning excess profit to shareholders (Q4)
- 25 mil in share by back (will slowly help increase the price)
- internal cost cutting
You need to read the RNS and white papers. I think all the focus of the new BOD will
help the price of the stock increase overtime and we will see natural stock increase.
Revenues - Operating cost = P or L
If you dont see significant progress in the share price increasing there are always other
finance tactics you can deploy. But the premise remains in 12 months time the stock will
increase to your breakeven point, if not the ROI decreases slightly, by every month you hold.
But I personally think they are doing all of these actions in order to sell off in the future, and
then you would potentially get an even greater ROI.
Hard to believe but Barclay's still haven't got the corporate action complete !
They finally got the shareholding altered to the right number of shares mid afternoon, but even now there are no buy or sell buttons on the stock.
Plus if you do a search of the CNE code it doesn't appear now at all.
LOTM
I dont follow you Kioto.... Why would the stock go back up to the same MCAP as pre dividend? The company has 0 cash flow positive assets, therefore no way of creating this type of value, especially if any free cash is to be returned as future dividends.
This is not a 51% ROI.... all else equal the dividend will make or lose you no money, it will only move your money around.
Keeping this at a high level. ALL stocks drop by the issued dividend amount.
Your banking on the stock to recover to the total price of purchase in order
to relies the gain or dividend amount.
In cases where the total stock price will drop to much, companies use an accounting treatment called shares consolidation. This means they give you cash dividend, but your currently holding are also reduced by this amount. (reducing number of shares, and value).
In the end in both cases you are banking on the share price to rise to the total cost of purchase in order to relies your ROI. The best example I can give is below.
I did an assessment, and to invest this time around (I basically) loaned CNE.l some money
and if the share price return to my breakeven point in 12 months, I would have received
1,540 GBP for the 12 month period of time.
If the stock takes longer to recover then the monthly figures gets adjusted accordingly. Being that this is a long term hold and knowing:
- The BOD is big on dividends return to shareholders
- Q4 will bring another dividend (potentially)
- 25 mil in stock buy back (to increase the price of stock over time)
This is a good long term bet. Where else can you get a 52% ROI ?
Just to mention, Aviva and a couple of other companies did this.
The fundamentals are all the same. The company will give you free
money without equaling out your current position. Then time will be
your bet friend.
I know the BOD did stupid things like:
- Tinder offering to return Indian award (not tangible to shareholders)
- 2 merger attempts
- Not aggressively pursuing dividends in order give shareholders tangible return
That is why they are gone. I read all of the RNS and white papers, and the new BOD
has made it clear that they will operate differently...... or else they will be gone also.
I can't really comment about last year's competing deals/bids as its several years since I last looked at what I remember as Cairn Energy.
However I actually like what's about to occur with the company.
Existing shareholders ( happy or disillusioned) by recent events have big decisions to make.
If you just take the special dividend & don't re-invest it back into the company's shares then you're not going to get the sort of £2.70 value that was on the table previously, for quite some time.
However if you do re-invest all the cash back into the new shares, then you will probably end up getting a return of over £2.70, in a reasonable timeframe.
If you think about it this way.
The company has manage to buy in around 55% of the shares in issue for just £2.176 (70 x £1.15 = £80.5 divided by the 37 shares that were removed by the consolidation).
So just over 166M shares so far have lost out on that other £0.524 ( by so far I mean that the share buy back will increase that number but we don't know by how many or at what average price per share yet either).
That "lost" money should now be added to the overall pile & divided by the 148.5M shares left in issue. This works out at £0.5875. So with everything else being equal. You'd be expecting your new holding of CNE shares to be worth £3.2875 instead of £2.70 and the $25M+ share buy-back will only continue to increase that figure slowly but surely.
Now there might be better investments elsewhere to invest in, depending on your views, but what I'd say for sure is that CNE is a far better investment opportunity today than it was last week.
LOTM
Mr K etall
They have f****d is all up right god and prompt, Ten years waiting on. Billion ,$ promise payback to share holders, well all that has happened is I have half the amount of share's I started with. Explain that.
One really ****** off holder.
Lessons from the past.... always pass on excess monies to shareholders to reflect "tangible" shareholder value: from the ghost of the previous BODs .
Then with time, they will back you for merger opportunities.
All that happened is par for the course. This happened last time.
1. Ex-Dividend date comes
2. Shares owned gets reduced (consolidated)
3. The new value reflects dividend amount (so your getting 50%)
4. You banking on long term investment and price to recover to "cost per share" - this is your break even point
Cheer up... we have a potential Q4 dividend, plus 25 mil stock repurchase(which should increase the current value....
The last BOD did us dirty with a Tinder offering which passed on ZERO value to shareholders.
I think in time they will sell this company and thats when you can cash out. Think long term.
Rags I am raging, although there is nothing I can do about it.
I am approximately £10k worse off than if we had accepted the Newmed deal. Even if by some miracle the SP goes back to 270, we only have half the number of shares now. And why would it go to 270p on the basis of the Egypt asset and some legacy payments?
What benefit did the one billion tax rebate provide shareholders?
Would have expected better from a major bank
Barclay's still haven't done the corporate action :( so I still have the old number of shares & not able to trade the stock either way.
Can't even buy the new stock, which is really annoying as the price will rise once everyone get's used to the change, not to mention the large wad of cash next Tuesday.
LOTM
Where are all those who believed the hedge funds rubbish about £3+ a share and voted down a £625m dividend and £2.75 share price? Kite lake (one of those funds) has sold 5% of its holding.
How there is hardly any discontent among all of you amazes me…..
MM's taking everyone for fools with the massively wide spread & sharp drop in the share price.
It should have opened at roughly £2.15 bid & £2.17 Offer following the share consolidation.
A 7p spread compared to the 0.8p or less that has been there for days is just ridiculous, MM's are just loving the confusion & profiting handsomely from it
LOTM
CAPRICORN ENERG
Another name change .
Another loser might be a special div coming .
The dividend payment will be on the original number of shares as it has gone ex divi before the consolidation
payment for the divi is due on 23rd May
That is correct
on every dividend the SP drops by the amount given in the dividend
in most cases people do not really notice it over a longer term investment - but in this case it is very large - and that is exactly why they did the consolidation to give the appearance of share price being roughly the same
if consolidation was not done the SP would now be showing as approx 105p
... also, does this mean I only get the divi on half the shares?
This looks like a right-royal *** up to me!
I expected them to pay the divi before consolidation the number of shares. Either way, should they not consolidation the sp too? I'm currently showing 50% of my investment has disappeared!
Its as Horults examples,
page 15, point 12
https://www.capricornenergy.com/umbraco/surface/media/mediaitem/501307-capricorn-circular?path=/media/3538/501307-capricorn-circular.pdf
Kite Lake selling down 5% of their holding.... says everything
My CNE shares no longer have buy/sell buttons available on them in Barclays.
It will be interesting to see when then shares change over and when they start to be tradeable!
I'm hoping 1st thing tomorrow morning but it was like 2 hours after the market opened before I could trade something else that went through a share consolidation. :(
It's going to be interesting to see what price they open at and how quickly the share buy-back kicks in again & how aggressively they buy in the stock. I know it all depends on the daily volume traded, but I'd like to see them buying in aggressively when the price is £2.15 or under, even if that eats up £1.5M of the buy-back amount in a day.
LOTM
You only lose fractions of share not anything which does not match up exactly to a multiple of 70. So take your number of shares, divide by 70 and then multiply by 33
so if you have 70 shares (70 / 70) * 33 = 33 new shares
if you had 69 shares (69/70 ) * 33 = 32.53 shares - so you get 32 shares and the 0.53 they add to everybody else's and give it to charity
if you see what I mean 😀
Been double reading the circular
"Fractional entitlements arising from the Share Consolidation will be aggregated and sold in the market on behalf of
the relevant Shareholders. Given the proceeds of sale are expected to be less than £3.00 per individual
Shareholder, and consistent with the Articles of Association, the Board intends to donate the aggregated sale
proceeds of the fractional entitlements to charities chosen by the Board"
My guess fractions will be sold, and money given to holder, as it would add up to quite a sum..
But not sure..