Loading ...The funny thing about this First Majestic (AG) (FR.to) news today…
…is how it’s suddenly pretty important to the company. Here’s the NR and I’ve stuck the whole thing at the end of this post for reference purposes, but the matter to consider is this:
When the judgement originally came down, favouring First Majestic (FR.to) (AG) and going against Hector Davila, the market gave a small shrug and just carried on without giving FR.to much credit. That’s because on April 24th 2013 FR.to was a CAD$12.37 stock, the market cap was CAD$1.445Bn (with a B) and the CAD$96.3m awarded represented just 6.7% of the FR.to market cap, as well as probably realizing that there would be a whole long appeals process to go through as well.
But now, even with CAD$14.9m of the judgement banked, the CAD$81m that’s left to be collected by FR.to is important cash for the company because FR.to is now a mere CAD$4.90 share price and the award, if collected tomorrow (and that appeal has just been thrown out by the Supreme Court so where is Davila going next, The Hague?), would represent 14.1% of its current CAD$575.91m market cap. Or if you like, it’s 69c/share on a sub-$5 share price. It also compares to the U$37.23m it has in cash treasury as at its last quarterly filing….or if you prefer, FR collects and triples its treasury overnight.
Finally, note that FR.to has not accrued any of the outstanding CAD$81m to its financials yet (see note 25 of the 3q14 financials, if you care enough) so the day that cash arrives it’ll be a plop! oh look! big money from nowhere! moment. Anyway, here’s the NR. Beats me why this didn’t move the stock more significantly than the silver producer average today, seems to have been totally overlooked.