RE: Ruble increasing - is that bad news for Poly26 Mar 2023 22:39
You’re of Russian descent, a CEO of a company with 66% of its operating assets in Russia. You have nearly all your wealth tied up in the company; your brother owns 24% of outstanding shares in the company. You have done a pretty good job of running the company prior to a couple of swinging dicks decided to start throwing munitions at each other through no fault of the company. The company is domiciled in the country seen as a Russian enemy; the company is primarily listed on the exchange of a country which is seen as a Russian enemy.
You have not been sanctioned, the company has not been sanctioned, the company has not been suspended, the company has not been delisted.
Your share price has no reflection on the company as an ongoing concern; the market cap is prime for a hostile bid. Your company was once valued only two years ago at 11.5 billion dollars, now valued at 1.25 billion dollars, and to be fair not a lot has changed regarding the company as an ongoing concern.
Now what do you do, or what do you not do? You do not start blowing a big trumpet by announcing great financial s; you keep production on track, but load up on debt in Roubles. You do not buy back shares, which with current cash in the bank; you could remove 25% or even 50% from the current 330 million pool of tradable free float. But you do not, as this would hinder the debt accumulation and bring unwanted attention. You keep CAPEX high, debt a bit frothy, make the company look not too attractive, and just keep your head down.
The company is today valued at 1.25 billion dollars with a possible free cash flow 23/24 of 600 million dollars. What’s not to like?
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