Hi, I'm new to the forum. Scaled into KAT over the last couple of months and ran into this board. Some of you are very helpful, thanks. However, some confusion reigns as well. Regarding this week's activities, some things to consider:
1. I often see that some post that we're receiving a "free dividend". Well actually you're receiving what you already own. The Handcamp property has been conveyed to BVIG in return for BVIG shares. The BVIG shares are held as assets in KATX for distribution to KATX shareholders. This, of course, is compensation for the sale of Handcamp to BVIG. Right now, KATX is "even" on the deal; shares for property.
2. Many seem to think that there will be an increase in share value as a result of the dividend. Why so? Actually, we should expect KATX to go down in value as they release the shares of BVIG. That is, they gave up an asset--the Handcamp property. That asset (now represented as BVIG shares) will no longer be in KATX, so its value should go down. However, you will receive BVIG shares. Thus, net net, there should be very little change in aggregate share price if you add them together 1KATX + .25KATG. Yet many of you seem to think the dividend action will somehow change aggregate share price. Frankly its nonsensical. The dividend is merely dividing up your existing ownership into two companies. That in itself should not cause value to magically appear.
3. The creation of BVIG for the purpose of holding the Handcamp property on the OTC BB is a signaling event. That is, the event itself is a signal about future intentions of management, and thus is a value event in that sense. However, that value event occurs when it is publicly announced, not when it is performed. Our share price already reflects the impact of the signal, its done.
4. The only conversation that makes sense for discussing an increase in share price is not the business structuring issues, but the new information that comes from exploring the properties. The drill results are the key. Regarding that, I agree with many on this board that we have a lot of good news in front of us. That's the speculation. But, I disagree that today's price or a price after the 16th is somehow undervalued. Its likely fairly valued for what we know right now. Indeed, KATX is pretty rich at a market cap of $90 million. So a lot of expectation is already built in--given where we are right now, its hard to argue that we're cheap. We're only cheap if the drill results says we are. Good luck all.
