I woke up to an unpleasant news release this morning, that being GXE announcing that its strategic review has come to an end with nothing - absolutely nothing - to show for it.
I've been holding a substantial number of GXE shares at a considerable loss, waiting for the review to conclude in the hope there would be news that would put me in a better position. However, just like the CTS strategic review debacle, it seems to have led nowhere., and quite possibly just further reduced shareholder value.
It appears that none of the producers out there with bags of cash think the GXE assets are worth adding to their stables, so how can they be worth much?
Is there any light in this tunnel and I just can't see it, or is GXE destined to languish at its current very low share price for a long time to come, (especially given the apparent likelihood that even $90 oil, if we ever see it again, is a long way off)?
Dump it and move on, or hold to see if there's any upside that the market identifies out of this colossal waste of time that I'm presently unable to discern?
Thanks 5i.
Peter
While not great news, it does not necessarily imply the assets are not worth anything. It maybe just that management and the potential buyers could not agree on price. GXE has instituted a buyback with this news as well. The stock is very cheap, the balance sheet is fine, and the dividend is still being paid (it was cut last July). But on the other hand, the dividend cut annoyed investors, it is quite small at $165M market cap, momentum is negative and the sector is weak. To be fair, commodity prices did fall since the review was announced. Consensus still calls for fairly decent overall growth this year. We don't think it is 'great' stock. We would probably 'target' it for sale, but wouldn' react to this news and sell into it.
On CTS, it is worth noting that even with the 'no sale' the stock is at least now higher than it was before its review was first announced ($3.67 in Nov 2022 to $4.64 now).