PEB - Pacific Edge Ltd

[bwucey]

lol - and there was I thinking that I was the only one that happened too - the maddening thing is that when I don't buy the price goes up!! Oh, well I keep trying.

[Minerbarejet]

What are the forums opinions on dividends with this stock or has this been dealt with earlier. Realise this is a long way off Atm but is there any indication as to policy or intent.

[Minerbarejet]

If they have extra cash they want to return to shareholders do it via a share buyback or best of all, a pro-rata share cancellation.

How does that pro rata cancellation work. Is it ever done and under what circumstances. Any examples I could search for?

[GRIFFIN]

hi sparky and skid, no just kidding about selling the house besides it belongs to a working farm of which i have just finished feeding out in the pouring rain,HOW GOOD IS THAT.I have picked up PEB shares along the way and at this stage feel very satisfied with its progress and just have a feeling its really only in its infancy and one of our more exciting stocks going forward.

[Minerbarejet]

Abano healthcare did it a few years back when they were flush from cash from the sale of their audiology??? division.

So if XYZ Inc are returning $40m in cash, and the company is worth $200m, then they cancel/acquire one in every five shares held by each shareholder, meaning the company's earnings per share becomes a fifth more powerful, and investors receive the cash.

Done a lot in the USA.

In NZ, we tend to see a lot of share buybacks done on market rather than pro-rata cancellations/acquisitions.

It is tax efficient, particularly from the sale of an asset or in extraordinary circumstances, whereas special dividends or larger dividends incur tax.

Thank you for that clear and concise answer, Sparky.

[CJ]

I have an article where David was saying PEL would hope to pay a divvy after a year or two of US operations. PEDUSA could fund expansion through the usual company debt structures. PEL are not interested in courting T&A, I don't see them seeing that as the path to success they have worked so hard for.

Given they probably have years worth of tax losses, a dividend would be very tax inefficient. A cancellation should be done first I would have thought.

[CJ]

Hancocks - tax losses can not be distributed to shareholders. Therefore it needs to have that amount of taxable income before it pays any company tax. I assume they have enough losses to cover a few years profits.

To get imputation credits, you have to pay company tax. Therefore, if they paid a dividend before they pay tax, it will be an unimputed dividend which is not tax efficient as the shareholder will have to pay tax.

However, a company can return capital tax free to shareholders (upto the amount of 'avaliable subscribed capital' which is similar to the old paid in capital).

As a shareholder, if a company was going to pay out $10m to shareholders, I would prefer to receive it as capital or with imputation credits,rather than having to pay tax.

Not sure what the second part of your post is about. If you want something explained in detail, just ask. I could give you a 5 page opinion on that but it will cost ya.

[Minerbarejet]

Being a new PEB investor could I please ask the forum why someone would have 1,000,000 shares
for sale at 1.00 which is way and above the market. Is someone just showing off (egos again) or what. Dont suppose anyone would like to have a wager they wont be there if and when PEB gets into the 90s. I know its their business but it seems a bit weird to declare such a large holding so early. Is this a bit of market psychology at work?

[Whipmoney]

Being a new PEB investor could I please ask the forum why someone would have 1,000,000 shares
for sale at 1.00 which is way and above the market. Is someone just showing off (egos again) or what. Dont suppose anyone would like to have a wager they wont be there if and when PEB gets into the 90s. I know its their business but it seems a bit weird to declare such a large holding so early. Is this a bit of market psychology at work?

Maybe just to add volume/liquidity to the sell side in order to help suppress the price so they could buy more.

[Xerof]

Hancocks - tax losses can not be distributed to shareholders. Therefore it needs to have that amount of taxable income before it pays any company tax. I assume they have enough losses to cover a few years profits.

To get imputation credits, you have to pay company tax. Therefore, if they paid a dividend before they pay tax, it will be an unimputed dividend which is not tax efficient as the shareholder will have to pay tax.

However, a company can return capital tax free to shareholders (upto the amount of 'avaliable subscribed capital' which is similar to the old paid in capital).

As a shareholder, if a company was going to pay out $10m to shareholders, I would prefer to receive it as capital or with imputation credits,rather than having to pay tax.

Not sure what the second part of your post is about. If you want something explained in detail, just ask. I could give you a 5 page opinion on that but it will cost ya.

CJ, you might like to briefly share your expertise on the subject of the shareholder continuity threshold wrt c/f tax losses to complete the picture. I doubt they would be a T/O target until these are consumed by profits?

confession: I'm a 'bush accountant' armed only with enough self taught info to be dangerous!