Lots of talk about GALAXY's surplus cash from the recent sale proceeds and how it should be used. Some have mentioned ' Special Dividends ' AND ' Share Buybacks ' to name a couple. My personal opinion is that would be ridiculous and obviously coming from shareholders who may be feeling the pinch from the year long slides in the Lithium SP's.
Firstly it is I think somewhat ridiculous to mention these options when the Industry is clearly in a phase of early growth for those with first market mover advantages. I don't even reckon the Insto's would buy into that sort of proposal with respect to a ' Special ' Dividend - unless it was fully franked - and we all know that is not going to happen as the Company has not made profits and / or paid tax in its entire lifetime.
Secondly with respect to a Buyback - again I would reference the capital required for the Growth and / or Acquisition phase of the this developing Industry and say NO to this. IMO , A buyback would only be useful as a defensive move in the event of a hostile advance from perhaps another circling player. This scenario of course would be much less likely now that GXY is sitting on a much stronger Cash position than most.
I observe ORE has a handy US $207.7 million as well on hand at the half year mark , however I don't see their shareholders calling for a disbursement of ' special ' dividends or buybacks. This wouldn't make sense at all given they forecast a further softening in carbonate pricing into the first QTR of 2019.
So having said all that , it would be my thesis that not only has the GXY Managing Director spoken out publicly in stating that Industry consolidation is ' Inevitable ' , but the Shorter's are calling for it , the Market is calling for it , and the SP is in turn behaving like it. So I would suggest that is what we are seeing in indecisive struggle and the oscillating back and forth SP performance.
Time will be the only judge as to whether this actually eventuates , however my guess is that GXY will be at the forefront and may in fact be the first to move in this very much anticipated consolidation phase. Consequently , I have put extra special emphasis on staggering my next points of planned entry into GXY and will be continuing to watch it very carefully.....
Good Luck to all current holders as well as those contemplating GXY as a possible future Investment.
