The latest Investing Matters Podcast episode featuring financial educator and author Jared Dillian has been released. Listen here.
"The dividend plainly was not helping support the share price"
This is a new one on me, can't remember the times I have read about shares and seen the phrase, the large dividend will help support the SP.
So I will put my question another way, now the dividends has been trashed and if the dividend was not supporting the SP why is the SP falling after what would otherwise a good report.
If you were on the Titanic after it hit an iceberg would you say that's fine the ship is not going down.
Notrex
The problem I have found is that some shareholders fall in loves with a share and its BOD, treat their investments like the supporters of their local football team and can see no wrong.
I had the same sort of response on the CPI board a year ago, was attacked constantly for criticising CPI BOD decisions, 1 year latter SP trashed all of those CPI supporters have either changed their mind or gone away with huge loses.
Pickedpeck
"Terry - No one cares you're upset"
Me being upset or not is irrelevant
PLEASE answer the question why is the SP GOING DOWN after what would have otherwise be a very good report, the SP held up after the last XD as shareholders were not expecting this mess up. It will go up in a few days/months/years when the brokers wake up, the sun comes etc is no answer.
If this was liked by the major investors you mention they would be buying, it would not be falling but rising, this is clearly a disaster.
Just to clear up another point, this has nothing to do with where DEC is listed, it is about crashing the dividend.
"I do find it a bit crazy that people seem to be so upset with a company that is still paying an 11% annual dividend"
The SP plummets rising the dividend yield for new shareholders and leaves the LTH with a good but not exceptional yield. So the best they can come up with is to drop the dividend in order to save the SP from further falls, Genius.
So the new DEC strategy is to p1ss off a lot of its shareholders (especially LTH), cause the SP to fall on both sides of the Atlantic, will be known as a shoot yourself in the foot plan.
"* New plan in 2024 = investment, buyback, growth"
I seemed to recall this was the 2023 plan.
Did not Rusty say something like 2023 will transformative year, I think we have had enough of his transforms unless you are happy to build up a lot of capital losses.
"As others have said, the New York listing in Q4 2023 clearly changed DEC's strategy for 2024 and beyond"
When was this put to shareholders or even mentioned. I saw no information that dividends will be slashed after listing in NY.
" It will take a few days to work through and settle down"
Really if this is so liked why has the SP not gone up in the US, may be some sort of lame excuse for UK but after all those US buyer must be so happy about the new plan they are selling out.
"Holding the dividends has led inexorably to a collapse in the share price."
If that is the reason for then SP collapse then all companies should cut their dividend by 2/3 and the SPs will rise, great strategy.
If this was such a great move forward why has the SP dropped so much from a very low point not just in the UK but in the US.
DEC again misread the market as they were clearly not expecting this otherwise why would they have put a floor of £9.35 on the failed tender offer or was this debacle why they pulled the offer, they said legal problems but can we trust this, I am not sure anymore.
Bad choices after bad choices or perhaps DEC is misunderstood in the US as well and should look to list elsewhere.
"Crikey Jim: I can't believe it but I'll have to agree with you too"
I also did not think I would say this but Jim "I agrees with you".
As for those that think it is fine for Rusty to break his promise, as far as I am concerned a promise is a promise, break it and you lose all trust. Rusty has changed the raison d'etre of this company, I did not buy into this, there are plenty of other places including Oil and Gas companies I get a better yield without the risks or being lied to.
The problem with the gas price is partly due to Oil Companies now selling the by product of the Oil wells i.e. gas which has helped flood the market. These Oil companies will sell at any price as it is just a bonus and what else can they do with this gas in this ESG world. So as the Oil price rises more Oil is produced and therefore more gas and future gas exports are restricted due to Bidens ban.
It makes no sense buying more wells until there is a clear path of rising gas prices. DEC has further entered into the list of Gas companies supplying into a oversupplied market but now without the dividend to support the SP. If you are in a hole stop digging.
"I'm cross at the dividend cut so I'm selling now"
Perhaps so but where are the new buyers coming from, no one will trust Rusty on dividends in the future (I certainly won’t) and perhaps not much else, fool me once shame on you fool me twice shame on me. If the shares drop to half does that mean we will get the dividends cut in half again? It was stated that DEC will still deliver a top-quartile FTSE 350 yield, the question is what happens if/when DEC get booted out of the FTSE350, even less buyers. The one thing this will help is the Shorters.
So the company said is going to concentrate on BBs, is that the same company that said this in the past and had a mandate to purchase up to 10% of the shares but only purchased a small fraction of these.
Why buy more wells where there is a large over supply of gas already and the cash could either be used to support the dividend or BBs which will buy far more assets per $1 than buying these wells and help protect the dividend by reducing the overall cost. The situation is that Rusty is desperate to expand the company at any cost and he lost patience, he can’t raise money from more shares and he can’t borrow more so he has taken this away from the dividends and broken his promise to shareholders.
MrG123
Total agree, the SP has been trashed for many reasons and then Rusty uses this an an excuse to cut the dividend instead of setting up plans to help the company and SP recover. Any fool can increase the yield by trashing the SP, this is now officially a dividend trap.
From other board
Credit to meanreverter
"It seems that, in the acquisition of the Oaktree assets, DEC is spending ~54% ($386m) of DEC's market capitalization to increase DEC's production (or production per share) by 15%. That is, per unit of production increase per share, the deal costs DEC 3.6 times as much as buying back its own shares.
I haven't worked out the corresponding ratio in terms of reserves, EBITDA, or other measures of value; but I don't expect it to be dramatically different."
As the SP and dividend are down by 2/3 if Rusty had any integrity he should take a 2/3 cut in his salary, it would focus his mind to help fix this situation.
The one thing I do know now is Rusty is not to be trusted, instead of doing the right thing for shareholders by maintaining as much of the dividend as reasonable and buying back as many shares as possible given the current SP he decides to go on a buying spree partly funded by a total destruction of the dividend reversing he previous promise. The one thing that many long term shareholders were relying on and the main reason for buying DEC shares (not any more).
The tender offer is a complete mess, caused endless debate as almost impossible to understand and then canceled at the last minute because DEC legal team did not understand the law. However if not canceled with a floor price of £9.35 and current SP the uptake would be far more than funds allocated (perhaps close to 100%) so large scale back and more disappointment for the long suffering shareholders.
Rusty has sacrificed the dividend and SP (both down by 2/3) for his desire to grow the company at any price and given the shortens all of their Christmases at once.
What next, SP plummets, shorts make a fortune dividend yield rises and do it all over again.
The simple truth is that profit in the UK has become a dirty word.
PHNX bought these pensions at a price based on the current fee structure then the government in the form of the FCA decide to change this therefore making them less valuable. Perhaps the government should force the companies who sold these to repay some of the money after all they got an increased price based on what he government calls an unfair fee structure.
No wounder so many companies are leaving the London Stock Exchange with this lot in charge moving the goal posts to ensure no companies make much profit (EPL, Corp tax increase, ESG regs etc) and the next lot who will be even worse. Both of our 2 main political parties will not be happy until all companies in the UK are loss making.