My level of entry to RMS is .25 cents. In early days Chairman Kennedy burnt most of RMS cash by giving too much back to shareholders. He treated RMS like his own private cash cow and to be very honest RMS is extremely lucky to be where we are today.
I think the current director is switched on and this is a hard market to negotiate. Everyone over values their assets, then screams when there is a correction. Australians are are weird bunch, they overpay for assets and resources. The US and Canada would never touch some of the deals at the high prices we pay.
Assuming my numbers are correct there will be around 1.8 billion shares on issue after this deal and the value comes to around $2.60 a share. The share price will fall from the lag time and expenditure needed for SPR assets. RMS could trade between 1.50 and $2.05 SPR rerating as a produce will bring down the value of SPR assets. Producing companies are valued on performance not resources. BHP is a great example. This is a reality nothing to do with dissatisfaction.
RMS Price at posting:
$2.18 Sentiment: Sell Disclosure: Held
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