septa wrote: How this company could drop in price on said information astounds me!
well, i can think of several reasons why market reaction from some would be negative and, below, my take on each respective point:
1) short term traders (who may have bought on spec since takeover talk was aired) are selling as they see this transaction as likely to delay (or stop) any takeover bid;
my take: i don't try to get inside the heads of traders. i bought long before this takeover talk arose due to compelling existing gdo fundamentals so i wouldn't consider selling regardless of takeover on/off considerations.
2) people concerned with current high cost of gold production from rand and the associated porfitability of the resources/reserves;
my take: i got a shock when i read the $1200 costs myself but, as gdo management are neither fools nor mining newbies, imo they wouldn't buy this asset if they weren't confident of bringing production costs down well below $1000 per oz for gold-only production and, eventually, much lower again with uranium credits factored in;
3) some punters don't want anything to do with uranium since fukushima disaster, be it for perceived financial reasons or personal environmental concerns;
my take: "perceived financial problems" are just that - perceptions. imo the mid term to long term uranium prices are likely to be strong given the existing planned construction of new reactors. re personal environmental concerns i believe uranium is a mixed bag i.e. no greenhouse gas emmissions but obvious other concerns. this is a whole debate of it's own which can't be covered in a few lines ...
4) how often do you see a predatory company launch a takeover bid and the their share price doesn't go down? very rarely!
my take: refer to point 1) re fundamentals
all above imo. dyor ...
k
GDO Price at posting:
48.5¢ Sentiment: ST Buy Disclosure: Held
