Based on the call today an in specie distribution is not favoured by the board. I think it was the only option mentioned and it was stated that the board did not favour it as an option. I didn't read much wriggle room there.
Some shareholders, rightly or wrongly, want perceived excess capital returned to shareholders. They might see themselves on par with Buffett, being superior custodians of that excess capital. If we head into a global slow down, even if gold maintains its luster, you'd expect liquidity, broadly, to contract.
I get the tax argument, but that's at the investor interest level, not the company interest level.
I think it would be f***ing stupid to pay out $1B and then go back to the bank to borrow it or raise equity funding after a liquidity driven broad market sell off ie 12 months into a deep global recession.
With so much uncertainty, why the f*** would you return $1B to shareholders, for a short term sugar hit? Why not hold that on reserve and deploy it countercyclically or at least into distressed assets?
Obviously there's a WACC optimisation to be done, but people that want to act like PE, stripping out capacity for short term personal gains, then chopping the company off at the knees can GAGF.
GOR Price at posting:
$3.06 Sentiment: None Disclosure: Not Held
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