If the outcome of the SDV deal was known then this information would be largely priced into the value of the stock. The risk is obviously that no one knows what the deal will be and whether it will surprise to the upside or the downside. To state that an announcement of new information that prices what is expected to be GXY largest operating asset and the earnings derived going forward will not impact the total value of the company requires a very extreme belief in the efficient market hypothesis.
The fact is this company is priced at a touch over book value at current MC with no debt. SDV is on the books at 68m, the upside risk of a good deal increasing the carrying value of that asset and improving the SP is very real. The DFS for SDV had a NPV of over a billion dollars across the life of the asset, if this gets the go ahead the market will start factoring that in and I highly doubt the deal will price it at the current carrying value. If there is one announcement that has the capacity to float the share price it will be the announcement of final approval for development of SDV.
GXY Price at posting:
$2.06 Sentiment: Hold Disclosure: Held
