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Investment Q&A

Not investment advice or solicitation to buy/sell securities. Do your own due diligence and/or consult an advisor.

Q: Hi Peter and Team - After the recent deal, what is your opinion of management. You have clearly stated your thoughts on this deal (and thank you for that) but are there any positives left on the state of the management of this company. My feeling is that if management has deteriorated to such a low level in its ability to make smart decisions then the stock is no longer worth holding. Having said that are there any fundamentals that might make this a stock to hold on to in spite of the turmoil. Thanks.

Also are any fundamentals
Read Answer Asked by Rob on June 21, 2018
Q: I hold a position in Raging River at a 20% loss and would like to know what options are available to shareholders regarding the Baytex deal. As this was a 5i recommendation other members are likely in a similar position. What would you recommend shareholders do. Will there be an opportunity for shareholders to vote against the merger?
thanks for your sage advice as always,
Bob
Read Answer Asked by Robert on June 20, 2018
Q: Hi 5i,
The Baytex/Raging River transaction reminds me a little of the attempted merger of Dennison Mining and Fission Uranium, although there are some obvious differences too. In the latter, the FCU shareholders stepped up, voted against the merger, and the deal died, despite Fission management’s apparently supporting it. How likely is a similar scenario to play out with RRX? It may not always work this way but one might have thought that, if the proposed deal is so terrible for RRX shareholders, then it is really good for BTE shareholders. Yet BTE’s share price actually dropped more percentagewise than RRX’s did on the day. Were BTE shareholders really that enamored of the leverage that comes with a lousy balance sheet, and quarter after quarter of losses, that they didn’t want to accept the burden of higher quality, profitable assets? Finally, is it possible that this bad deal for good assets is being presented in order to force the hands of other potential buyers? And, in any event, how likely is someone else to look at it and say: Well, we can do better than that and still have it be accretive on an earnings and cash flow per share basis. (?) Thanks!
Read Answer Asked by Lance on June 19, 2018
Q: I have always considered RRX to be good value and getting better as the price has declined from the $11 range in late 2016 to just over $6 last week. So I can understand why Baytex would want to pick it up. But I don't understand why RRX management would want to sell - essentially at the bottom of the market, and at a time when oil prices seem to be rising. Is there some other consideration these sellers are getting ? Can you explain the rationale ?
Read Answer Asked by Don on June 18, 2018
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