Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?

[doc75]

The discounted warrants brought in $60m cash. Approximately 1/3 of warrants remain outstanding.  They now have $140m cash at corporate, pretty much exactly the market cap at today's price.   

What's your point?

Just reporting the facts, ma'am. 

There is some possibility that an SIB for the common is in the works, so the relative sizes of the cash pile and market cap is of interest.

That might have some relevance if the company had no debt or prefs, and didn’t burn cash. But...

You don't think the cash to market cap ratio is even relevant when the company has suggested it is contemplating a SIB and is now sitting on enough $ to safely take a substantial bite?   That's a very high bar for relevance.   

For what it's worth I don't expect they'll do a SIB for the common any time soon unless  shares crater in a market panic.   My guess is that they want to recycle the $ into new investments alongside some 3rd party capital. 

[brisbane]

The discounted warrants brought in $60m cash. Approximately 1/3 of warrants remain outstanding.  They now have $140m cash at corporate, pretty much exactly the market cap at today's price.   

What's your point?

Just reporting the facts, ma'am. 

There is some possibility that an SIB for the common is in the works, so the relative sizes of the cash pile and market cap is of interest.

That might have some relevance if the company had no debt or prefs, and didn’t burn cash. But...

You don't think the cash to market cap ratio is even relevant when the company has suggested it is contemplating a SIB and is now sitting on enough $ to safely take a substantial bite?   That's a very high bar for relevance.   

For what it's worth I don't expect they'll do a SIB for the common any time soon unless  shares crater in a market panic.   My guess is that they want to recycle the $ into new investments alongside some 3rd party capital.

So you think they are going to do -- or even could do -- a $140MM buyback of stock? I'd assume you don't believe they will or even can do that. Which is why saying they have a 1:1 ratio of cash to market cap is meaningless.

Again, if they weren't burning cash, had liquid assets, and didn't have preferred shares, then it might have some relevance.

Cash to market cap to me is really only relevant when: 1) the company is not burning cash; 2) the company has no obligations ranking ahead of the common stock; and 3) the company is in effect winding down, or at least shrinking its size. Otherwise the bulk of that cash either cannot be used, or is going to be used for some other purpose than buying back stock.

[doc75]

So you think they are going to do -- or even could do -- a $140MM buyback of stock? I'd assume you don't believe they will or even can do that. Which is why saying they have a 1:1 ratio of cash to market cap is meaningless.

Again, if they weren't burning cash, had liquid assets, and didn't have preferred shares, then it might have some relevance.

Cash to market cap to me is really only relevant when: 1) the company is not burning cash; 2) the company has no obligations ranking ahead of the common stock; and 3) the company is in effect winding down, or at least shrinking its size. Otherwise the bulk of that cash either cannot be used, or is going to be used for some other purpose than buying back stock.

Frankly it seems you're looking for an argument or still thinking I'm saying something I'm not.

The cash to cap ratio is clearly relevant in the context of an SIB.  It reflects their buyback capacity --- what fraction of the shares could (theoretically) be repurchased at today's price.   It's not all or nothing.  For instance they could manage a 20% tender at a price that might be pretty enticing for series 5 folks who were converted at $2. I'm not saying they're going to do it, but obviously if the cash/cap ratio were 1:100 then this wouldn't even be an academic possibility.  Hence relevant.

Note that I'm saying nothing about the wisdom or likelihood of them actually doing an SIB.  I think it most likely that they do not launch a large buyback but rather try to leverage the cash pile toward actually generating some money/fees.  It's clear from recent conference calls that they're well aware of their cash needs and also the softness of their other asset values.

[sculpin]

Now sitting on about $1.40 cash/share at the corporate level with an additional $33mm to come in if the rest of the DPM warrants are exercised by next May.



Dundee Corp.'s senior management will host a conference call on Monday, Nov. 16, 2020, at 10 a.m. ET, to discuss the company's third quarter 2020 results.

Third quarter 2020 results conference call and webcast

Date:  Monday, Nov. 16, 2020

Time:  10 a.m. ET

Webcast:  on Dundee's website

Live call:   1-888-231-8191 or 1-647-427-7450

Replay:  1-855-859-2056 or 1-416-849-0833

Replay passcode:  5533506

Dundee plans to issue a news release containing the third quarter 2020 results after market close on Friday, Nov. 13, 2020, and will also post it to the company's website. The conference call will be archived for replay until Monday, Nov. 23, 2020, at midnight. An archive of the audio webcast will also be available at Dundee's website.