Author Topic: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?  (Read 85831 times)

Cardboard

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Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #140 on: February 12, 2018, 02:12:31 PM »
https://www.stockwatch.com/News/Item.aspx?bid=Z-C%3aPMA-2568009&symbol=PMA&region=C

$12,000 worth of securites sold which triggers the need for a press release or a cost of around $3,000. Smart!

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Maximu$

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Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #141 on: February 12, 2018, 03:51:27 PM »
I am long the B and C rate reset preferreds.  Given that the rate reset feature provides significant protection from interest rate risk, I assume the large discount from par value primarily reflects the poor quality of the Dundee assets.  Out of (morbid) curiosity, when I see a NR like the one you just referred to I investigate the company to see if it is a hidden gem or a dog.  Petromaroc traded as high as $0.25 over the last 5 years and has fallen to $0.06 as of today.  The company currently has a NBV of $.02, with the assets by my figuring being approx. 5M shares of sound energy and $500K in cash (see Feb '18 news release re payment of debentures).  Petromarcoc is now effectively a shell ready for the re-birth of some equally speculative venture as the one they just exited.  My question after reviewing several of DC.A's holding is ... What is DC.A doing wasting its time on holdings like these?  And, why would I let Dundee manage my money in their new, fledgling investment management business when this is what they themselves invest in.  I think a serious re-focusing and re-branding is required.  Don't get me wrong ... I love investing in mining and speculative companies; however, these should be part of a balanced portfolio of other, more solid businesses providing consistent and growing cash flows.  Am I missing something with DC.A?


doc75

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Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #142 on: February 13, 2018, 05:10:58 PM »
https://www.stockwatch.com/News/Item.aspx?bid=Z-C%3aPMA-2568009&symbol=PMA&region=C

$12,000 worth of securites sold which triggers the need for a press release or a cost of around $3,000. Smart!

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They sold the remaining 13.2 million shares today for approx $800k (0.06 per share).

As usual with Dundee, I'm curious what triggered the sale, and even more curious what triggered the investment in the first place. 

gokou3

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Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #143 on: February 13, 2018, 05:30:39 PM »
Wondering if anyone knows what are their cost basis for Diagnos and PETROMAROC?  If I had to guess, they probably bought high and sold low.  Of course, the main worry is that they need the cash due to a liquidity crunch.  I think they sold DREAM last year for this reason.

Discl: long DC.B, DC.D

Rod

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Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #144 on: February 13, 2018, 05:55:00 PM »
Wondering if anyone knows what are their cost basis for Diagnos and PETROMAROC?  If I had to guess, they probably bought high and sold low.  Of course, the main worry is that they need the cash due to a liquidity crunch.  I think they sold DREAM last year for this reason.

Discl: long DC.B, DC.D

I think it's just part of a plan to reduce their holdings generally. I don't think there's more to it than that.

doc75

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Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #145 on: February 13, 2018, 07:19:04 PM »
Wondering if anyone knows what are their cost basis for Diagnos and PETROMAROC?  If I had to guess, they probably bought high and sold low.  Of course, the main worry is that they need the cash due to a liquidity crunch.  I think they sold DREAM last year for this reason.

Discl: long DC.B, DC.D

After a little digging I came up with the following narrative, but I did it on the quick so take it for what it's worth:

- In Feb 2012, Dundee buys 10 million shares of APIC Petroleum at $0.20 per (a 13% interest)

- In Fall 2012, APIC agrees to  merge with Longreach Oil & Gas, which has a focus in Morocco.  APIC does a private placement prior to the merger to raise cash for the soon-to-be-combined entity's drill program.  They raise $30 million through subscription receipts.

- Dundee participates in the private placement, buying another 56 million shares at 0.13 per (now a 21.4% interest)

- The merger goes ahead. Shareholders of APIC are entitled to one share of Longreach for every 5.3846 APIC shares.

- In April 2014, Dundee purchases $2.8 million in units of Longreach, each unit priced at $1000 and consisting of $1000 face in convertible debentures + 1000 warrants with $0.30 strike.

- In July 2014, Longreach changes its name to PetroMaroc.  At this point Dundee has nearly 13 million shares of PetroMaroc.

- In November 2014, Dundee Capital Markets is appointed financial advisor to evaluate "financial alternatives".  PetroMaroc does another PP, the first tranche raises $3 million at $0.15 a share.

- In January 2015, PetroMaroc announces second tranche of the PP was unsuccessful, and debenture interest due Dec 2014 would be paid in shares, valued at $0.06 each.  Dundee should have received about 1 million shares through their debenture holdings.

So altogether, Dundee's Petromaroc shares cost them roughly $9.25 million.   Sold today for less than a tenth of that.

There's also the $2.8 million in debentures+warrants, which I presume are still outstanding.  And possibly some more sunk money through affiliates. (e.g. in July 2017, PetroMaroc announces a debt-for-shares settlement with a Dundee subsidiary, where $325k of debt is exchanged for 1 million shares at a deemed price of $0.325 (US) per share -- a curiously huge premium to market)


petec

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Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #146 on: February 14, 2018, 02:29:12 AM »
What is a bit crazy is that the DC.PR.E trade at $24.30 or pretty close to par of $25 and offer a yield of 7.7%. They did redeem about 10% of them recently and the rest are due for redemption on June 30, 2019.

However, why do investors believe that they will redeem them instead of trying once again to exchange them for another serie as they did for Serie 4? And even if they have the intention to redeem them, why are investors perceiving the financial risk of that happening to be very low with them trading near par, while they discount the "B" and "D" by over half of par???


I'm fairly new to Dundee but FWIW Series 5 shareholders would get to vote on any exchange, as the Series 4 holders did; they would presumably only vote for it if they liked it, and dissidents would presumably be paid in cash as they were for the Series 4 exchange. So I think the put, which is valid any time from June 2019, has real value compared to the Series 2 and 3 prefs (for which par is only really relevant in a bankruptcy) so I am not surprised the 5s trade where they do.

What's more interesting to me is that a) the 4s were exchanged for mix of a smaller amount of 5s and subordinate share warrants, meaning the 4s were partially converted into equity (although I don't know if the warrants converted). If they keep doing that, in effect, the 2's and 3's get promoted up the capital structure. The 5's are also convertible to sub shares at the company's call. It's hard to see any rationale for doing that at the moment but if things got really tight at Dundee it presumably could happen, which only accelerates the promotion of the 2's and 3's. Putting it another way, the 5's are accounted for as debt, depressing the equity coverage of the 2's and 3's. That might be too conservative.

petec

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Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #147 on: February 14, 2018, 02:42:33 AM »
Wondering if anyone knows what are their cost basis for Diagnos and PETROMAROC?  If I had to guess, they probably bought high and sold low.  Of course, the main worry is that they need the cash due to a liquidity crunch.  I think they sold DREAM last year for this reason.

Discl: long DC.B, DC.D

DREAM solves the liquidity crunch. They are now very net cash at the holdco and have virtually no recourse debt. There's no liquidity crunch - just a question mark over whether you really want these guys allocating that cash. Judging by the carrying value vs. cost of the investment and equity-accounted portfolios as of q3 they are very good at buying high.

bizaro86

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Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #148 on: February 14, 2018, 06:37:52 AM »
Wondering if anyone knows what are their cost basis for Diagnos and PETROMAROC?  If I had to guess, they probably bought high and sold low.  Of course, the main worry is that they need the cash due to a liquidity crunch.  I think they sold DREAM last year for this reason.

Discl: long DC.B, DC.D

DREAM solves the liquidity crunch. They are now very net cash at the holdco and have virtually no recourse debt. There's no liquidity crunch - just a question mark over whether you really want these guys allocating that cash. Judging by the carrying value vs. cost of the investment and equity-accounted portfolios as of q3 they are very good at buying high.

I would value a stack of hundreds in my safe deposit box at face value.

I would value a stack of hundreds a crazy guy had lit on fire at zero, even if they theoretically belonged to me.

I'm not totally sure where Dundee fits on the scale, but their record is pretty bad on some of this stuff.

That being said, they do have $2 in retained earnings for every $1 in capital raised. If they would stick to building and selling financial services businesses instead of investing in speculative nonsense this would probably be a great investment.

no_free_lunch

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Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #149 on: February 14, 2018, 07:28:18 AM »
I'm not totally sure where Dundee fits on the scale, but their record is pretty bad on some of this stuff.

That being said, they do have $2 in retained earnings for every $1 in capital raised. If they would stick to building and selling financial services businesses instead of investing in speculative nonsense this would probably be a great investment.

You really nailed it.  What seems to have changed is their diversification efforts, the sale of some of their financial service businesses and the former CEO retiring/passing control to his kids.  I am not sure this is the same company it once was.