Share buy back thoughts from yday26 Sep 2018 09:59
'Now assuming none of the ii's are going to sell at these depressed levels, then it is the company's intention to try and squeeze the shares from over half of the remaining pi holders,---- and there's only one way they will achieve that, --- that is to keep the SP low, and wait for the pi's to cave in-
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-Always seemed strange to me, that when SLE issued all those shares @45p, they stated that future policy would be a share buy back.
-To me it always seemed totally irresponsible to issue stock @45p with the intention of buying them back at a higher price------so their intention must have always been, to buy them back at a lower price, --and that is now what they will achieve.-------funny old game.'
I was out yesterday - having posted early in the day I thought it might have been a good day for shareholders...it wasnt really was it - however the above post made me chuckle...no one - repeat no one - who is 'long' the equity of an exploration co like SLE will have any interest in forcing a lower price...and more pertinently no one is forcing anyone to sell their shares...if the company announces its going to buy $10mm of stock back in November and it has the cash in the bank to do so, then every day it will instruct their house broker to go into the market and buy, say, 500k/day for 20 days to get that money spent. At the current SP, thats 500k shares. According to my info, there has been one day since June when total volume traded on any one day has exceeded 500k and that was 700k on the 27th June.
Again simple back of the envelopes stuff...you are an investor in SLE and you know there is going to be a buyer of the stock of the company in the market of 500k / day do you A) sell your stock or B) wait for the price to rise as the broker goes looking for some excess stock.
Now we know STT has 10% of the company and they are long at - yes 45p...so where is the likely inflection point for the SP to rise to if no one else wants to sell...yep 45p...
oh and then in february, who knows we might even get another $18mm for our loan repayment...and the company might decide to buy more stock back...
oh and one last thing...one day we might get something from 10% of Eroton and maybe even something from our 5% in BarryRoe...
This company is valued ay too cheaply because it has been appallingly run for so many years and deserves no benefit of the doubt. However, cashflows are very real things and as per all my posts, if the cash keeps coming in, like it or not, the share price will have to start rising.
I hope :-)
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