Canadian Money Forum banner

Torc Oil and Gas Ltd. (TOG.TO)

23K views 62 replies 12 participants last post by  favelle75 
#1 ·
Torc Oil and Gas. Rumbling that they are going to combine 5 shares into 1 (reverse split?). Just wondering if anyone has any thoughts on this one?
 
#3 ·
Splits and reverse splits are fundamentally meaningless.
Companies do it because it creates a temporary buzz, and also allows them to fit into (or out of) certain investor classes.
Such as some conservative mutual funds won't buy any stocks below $2 - therefore a reverse split helps.
Some companies (like Buffet's Berkshire) don't want their shares held by short term day traders so they've never done a split.

There have been junior speculative mining and energy companies that do reverse splits, only to watch the shares slowly drop back down to the pre-split nominal price :rolleyes2:
 
#4 ·
5 shares into 1 (reverse split?).
Yes, that would be a reverse split.

While a reverse split is all about increasing the share price [opposite of a stock split], but resulting in no changes in market cap, you still need to find the reasons for the RS, ie: was it to avoid falling to penny status and running in danger of being delisted? Does not necessarily appear to be the case here, but just mentioning it as I noted that the stock did drop nearly 50% this year [$2.72/$1.34], and not impossible to have fallen/or fall in the future below $1.

I would just keep in mind that while nothing changes in either a reverse or stock split, the reasons for doing so are exact opposites [backward vs forward].

But also, not necessarily a reason to always sell, if you already owned the shares, or not buy.
 
#7 ·
just catching up on this story but as an eye-opener it looks good.

they're the old Tristar O&G gang, no wonder they were able to raise a quarter of a billion dollars for new acquisitions last month, easy as ice cream. No wonder the cppib bellied up. These are blue chippers.

see the insiders in the table below, all buying subscription rights in the new issue on 6 august/13. There's the cppib. Those other guys are the executive, pretty near all of them. Strong signal.

if company is reverse splitting, i'd have to dig deeper for more story but ottomh this is a fairly new gang at the helm, they're purchasing large promising light oil property in southern saskatchewan (hence the 1/4 billion $ new issue), they're initiating a dividend, they're considering reverse splitting in order to push the share price up to institutional levels, since most institutions are prohibited from buying penny stocks.

the OP was favelle? good for you, favelle. but wait, you left without buying? pity, you had a good thing by the tail. it's probably not too late to come back.
.

 
#9 ·
yea all my short-term charts are saying TOG should drop now but it is refusing to behave itself

there's also TOG.R. These are the subscription receipts. They are actually what was issued august 6th for something like 1.57.

closing date is mid-november. One subscr receipt will be exchanged for one share. The receipts are trading about 6 pennies below the share price - 1.68 vs 1.74.

there is apparently one major investor in the subscription issue (the cppib?) who still has the right to drop out. This would collapse the deal. Subscription receipt holders would then be refunded out of the escrow monies, but only to the tune of the original 1.57, ie the potential loss between now & november 12 is roughly or mostly - but not entirely - capped at 11 pennies.

what are the exceptions? well, things could turn bad but the cppib might not drop out. That would leave the deal intact. There'd be no easy way out, then, for small retail investors.

it's a hard choice. I think the reason there's such a brisk market in the subscr receipts is that institutional investors are thinking phooie if things turn real bad the cppib will drop out for sure, so by buying the subscr receipt we are, in effect, buying a kind of put on the purchase ...
 
#11 ·
quick check of the dividend news shows that a shareholder would receive .01666 per share for the 2 dividends combined that are payable in october & november/13. These are the dividends that a subscription receipt holder would miss.

yet the subscription receipts are trading 5-6 pennies below the shares, so clearly the risk factor - that the deal might possibly fall apart - is in play.

http://torcoil.com/wp-content/uploads/2013/07/TORC-Acquisition-_July-16_2013.pdf

but i see no evidence whatsoever that the cppib is doubtful or weak-kneed about this deal. On the contrary, the cppib will have a representative on the TOG board, they will be 25% majority owners, the evidence is that the cppib itself was the locus that played a key role in bringing about the reconstruction & the renascence of Torc Oil & Gas.

the company says that as soon as the subscription period closes on 12 nov/13, it will carry out a 5-1 reverse split (some might call it 1-5, but i'm sure everybody gets the drift).

the dividend that will commence 15 oct/13 - with a record date of 30 sep/13 - will be .10 per share per annum, for a yield of 5.81% on today's prices. Investors who favour DRIP dividends might be pleased to learn that TOG intends to offer a 5% discount on DRIP dividends, a relatively high discount rate that is becoming hard to find these days.
 
#15 ·
you did buy in the end? good for you.

brokers often take a few days to settle things after a big reorg so u will soon find the correct number of post-split shares in your account, i am sure.

i didn't buy which might very well have been a dumb failure. I still think this company is neat & a keeper. The negative factor for me was simply that an options market in TOG has not yet developed.

there are other quality keeper stocks with strong dividends plus lively options markets, so i'll wait on TOG until the options appear.
 
#17 ·
exchange-traded options known as puts and calls.

there are now 12 options exchanges in north america; one in canada, the others in the US.

TOG's options will appear on montreal exchange. There are some thresholds the stock must pass first, before dealers are permitted to set up an options market. Criteria such as top quartile market capitalization or top quartile trading volume over a period of time are used.

TOG will pass, it's likely only a matter of putting in the time.

there are other quality canadian stocks yielding 5% dividends plus they already have decent options trading. Where i might have shot myself in the foot is that, by electing to wait until TOG has options (probably in 2014), there is the possibilitiy that the stock might move north, even into the $10 range!

but you & actor both did find something of good quality, favelle. Félicitations to both of you. Price-wise it looked like just another penny stock to begin with, but situation-wise it was a diamond in the rough.
 
#19 ·
Anyone else a bit concerned this reverse split may hurt the stock in the long run? I've seen it before where a stock does a reverse split and slowly falls back to its previous levels... I like this stock a lot I just question if there is any real upside to the reverse split and if it adds in additional risk.
 
#20 ·
Benj Gallander (Contra The Heard guy) doesn't like the reverse splits. He is a smart guy worth listening to. He cites a striking stat: 90% of companies that do a reverse split are still down one year later, below the split price.

No idea if his number is right. Right or not, TOG might be the 10% exception. CPP involvement is a reassuring sign.
 
#21 · (Edited)
it's possible that TOG could be part of the successful 10%. This wasn't an ordinary reverse split, it was not designed to patch a broken stock. It was more like a reverse takeover.

the way i see it, TOG is a re-engineered company. Out went the old penny stock ID. In came a new medium-size oil & gas producer with a new business plan & huge new light oil properties in southern saskatchewan.

the story looks as if it had been scripted to order by & for the cppib.


EDIT (aside to favelle) if you have a chance might you let us know what else your father-in-law is liking :peach:
 
#36 ·
did ya'll get DRIPs? remember the company is going to pad those sweet dripped divvies by 5%!

i didn't buy, drat. I look for stocks w TOG's profile but also w strong options markets, which haven't developed yet for torc & probably won't for a while.

the desired profile: strong, steady, middle-of-the-road. Nothing too wild either upside or downside. But enough volatility to generate decent premium in the options.

mille félicitations à tous les acheteurs!
 
This is an older thread, you may not receive a response, and could be reviving an old thread. Please consider creating a new thread.
Top