Some interesting points to consider fnf. I am not convinced however, as they do not need to take over the management to take over the company, and agree it would not be in their best interests. I think they would however still have considerable input into the financing, and based on their track record they do not prioritise returns to shareholders. If institutions and sophisticated investors do not like it and want out, where are the buyers going to come from to support the share price. I would feel more comfortable with a YES if anyone could find evidence of institutions holding in similar circumstances.
In the long term then I would certainly welcome a significant investment by a major like SD, like 35%, but at a fair price. In the mean time I would like to see this deal go away, get a quick boost back up to 5-8c share price, and then if gold goes to $2000 by the end of the year as forecast then our quarterly will be seriously shining. With our current production and costs, would anyone question a 10c? share price? That would be the time to then look for a serious big brother partner.
Still if the yes vote goes through and the institutions stay with us I will give SD the benefit of the doubt, but I will not follow the share price down. I think there is still a big downside risk if there is another acquisition announcement made. With the increasing gold price forecast any acquisition FML make will be at a 50% premium minimum and likely to drop the price no matter how good the potential is.
FML Price at posting:
3.7¢ Sentiment: Hold Disclosure: Held
A personalised tool to help users track selected stocks. Delivering real-time notifications on price updates, announcements, and performance stats on each to help make informed investment decisions.
(20min delay)