Sirius Minerals21 Jan 2020 15:34
Its a simple option really for the 85k small (retail) investors. Option 1 is accept the Anglo offer. In my opinion its undervalued but its out there now and there hasn't been a response yet. The fact an offer has been made will make any public funds intervention unlikely (unless shareholders reject the ideal - see later)and it has forced Sirius into a corner, in reality they can't go back to the money markets. The reason? Because the least risk option for investors is to buy Anglo on the basis the acquisition will raise shareholder value (and in my opinion it should but not in the short term).
Option 2 is to hold, which is my preferred position. This decision should be based firstly on can you afford the loss? If you can then the risk is that Sirius don't run out of money and go into liquidation. Management have said this will happen but lets be honest they haven't really worked in the shareholders interests for the last 6 months, in fact since Oct 18 the share has been in long term decline. Its their inability to find funding and some of the very "strange" deals that have got us here in the first place. We are told that people will lose jobs but the liquidator, if it gets to that, will sell the mine as a going concern so most of the employment in the mine and tertiary businesses will be maintained. My reasons for "Keep"? I don't believe this is the end of the story. Those at 20p and over aren't going to get their whole investment back and possibly the same could be said of the Low 10's, But 5.5p is derisory and there is only one winner there and its Anglo. Businesses cannot be sympathetic to investors losses. But investors can expect fair returns, even on a loss. Anglo are underpaying by at least 50% and despite stories to the opposite there are others watching the situation with interest.
Of course the one proper solution for UK Limited would be government support for funding. Its easy to say that government shouldn't get involved but not supporting the 85k will effectively take millions (probably billions at mature market value) out of the Yorkshire economy and place an important UK asset in the hands of the US. And they will play around with it, mark my words! We sold off the silver in the Thatcher years. Under Boris we are selling off the gold! But you can understand his issues - he has a railroad to build!