Time to ignore the merger talk and discuss value. These are some rough numbers to chew on.
WGO has 723m shares on issue (fully diluted) with another 115m coming from the placement.
At 18 cents, the WGO Mkt cap is $150m and subtracting about $20m cash, an EV of $130m.
STX has 1,766m shares on issue (fully diluted).
At 20 cents, the STX Mkt cap is $352m and subtracting about $22m cash, an EV of $330m.
So, the premium in EV is $200m which can be attributed to management, PB acreage, Jaws and Operatorship.
In the real world, these premiums look high and difficult to justify, IMHO.
That is the reason I am currently buying WGO shares even after getting a good fill in the Placement at 13 cents.
Clearly, the 2 shares are closely tied in a valuation sense as the main asset in both portfolios is currently WE. I just believe that the relative values are out of kilter.
All IMHO and DYOR. No advise offered, just a few facts.
PS I also own STX shares.
AL
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