I don't have any issue with pointing out and discussing what the risks are... in any investment... and the nature of the risks here have been pretty thoroughly dissected and discussed over a long period of time...
I do have an issue with presenting singular risk factors in isolation from the rest of the market context... which yours tends to do... as that tends to misrepresent the situation more than it helps to illuminate it.
I don't find it particular shocking that a large company with deep pockets might have an better than average ability to acquire shares of small companies they already own, that they think represent a value... at good prices. Where you see only risk in the result... there is in fact a lot more to see. I've pointed out before that the deep pockets of parent Philex mean Forum and FECOF don't have other, and vastly larger, risks that virtually every other small exploration company will have...
You see that in Philex ponying up $10 million in a loan for Forum to fund the current seismic work... Show me another couple of junior explorers that don't have the typical financing limits, or financing risks... the way Forum and FECOF don't... and I'll probably find the RELATIVE risk differential at least as interesting as I do here...
Otherwise, I also disagree with some significant portion of your analysis of the risks relative to Philex's intent... and, even more, with your analysis of the relative ability of Philex, or anyone, to run roughshod over the rules...
Won't disagree with the general perspective on the scale of the risks inherent in all the markets that we have now, given the level of corruption that has been institutionalized in our systems...
It is still simply a FACT that investors have choices to make, and that their choices matter... in defining some limits in what is going to float... and what will not.
I'm not a big believer in investors being passive patsies...
Investments in stocks are like investments in anything else... You have rights, but the fact that rights do exist is always wholly meaningless unless you are fully willing to mount a vigorous defense of your rights.
Regulators will look carefully at any deals being floated here... to the degree that investors are careful enough to ensure that the regulators have good reasons to be very careful in what they do and how they do it...
That still leaves me looking at Forum and FECOF and noting that BOTH are quite grossly to wildly undervalued...
I expect that value will out... and I judge that the risks in being taken out of my investment at some price higher than a share trades for now, that might still be below real value... is a risk that is more than compensated for by a variety of other factors...
I don't have other explorers in my portfolio that don't have real financing risks. Parent Philex's interest pretty much ensures that the wheels here are NOT going to come off...
Beyond that... it might be useful to discuss what investors here can and should do to address the issues with the risks that is seems are the only ones you care about. I don't accept that those risks, here, are necessarily going to be realized, as if that is fait accompli...
I think Forum and FECOF are BOTH heading MUCH, MUCH higher...
I also still think there were valid reasons why Philex ever thought it might be useful to have subsidiaries based in Canada and London... and think that those reasons have not been obviated by other changes that have occurred...
Perhaps I'm seeing some things there that are risk factors for them that Philex management is not ? That is always possible... and, I won't say that I've never had that happen before... but, it is simply a fact that Philex owners have obvious risks they need to address and balance, too... risks and potential benefits tied to choices they make (or, even, market trends) that need to be considered carefully...
I think they've done a fine job, thus far, of balancing those risks and potential benefits pretty well...
We see that clearly enough in the transitions that are quite apparent in the situation over the last year...
I'd be very surprised, from here, to see them do more than continue to balance those things... and step off that path of seeking balance, by choosing to go "all in" on a single bet, instead of continuing to seek balance without disrupting things that proved useful before... to provide... backup... to new plans...
Market dynamics and players interests and focus change... and politics and politicians, in any culture, are fickle. The "solid" deal you have today that enables things that have been not possible before... may not survive the next transition in the same form, without other reasons that it should remain "in balance" as dynamic tensions change. Diversification is always good... and, better, if you can manage to align competing interests and have both agree to help sustain your position vis a vis the others as a desired result ?
My opinion is that it is not nearly as much in Philex' interest to buy out FECOF and Forum... as it is to sustain them and enable them to succeed independently...
I think the Pitkin management approach appears obviously and vastly more sophisticated than that I can see as the historic legacy in FECOF.
I see a recent shift or two that are apparent within the group, and not just in the re-organizational efforts in Philex Petroleum, etc. It will certainly be interesting enough to see what DOES happen, here, next... and to consider what the differential results will suggest about the focus of and probable sources of management direction. I think it is likely that the entire company management focus in Petrol... is shifting more toward the Pitkin model. I think it would make VASTLY more sense to have FECOF and Forum EACH adopt more of that sort of a management focus... than it would to aggregate them in Philex Petroleum...
JMHO
.JPG)
.JPG)
