Greetings Contrarian, 

Hello and welcome to another one of your friendly mining horror stories, where we try to show instances where value is lost and you, the retail investor, is left holding the bag.

Horror Story: The Parachute That Screwed Retail

This is a monthly/fortnightly special issue that will tell the dark stories of this market.

A few years ago, in a land not far away, there was a battery themed company with a mixture of assets that appeared to be very promising in the EV revolution scene.

This company had royalties and physical material as well as other less prominent assets. 

Understandably, small retail investors had high hopes for the hot commodity.

After a short while of trending downwards at a time of temporary market weakness, the company marks down the value of its principal asset, and receives a bid for it at a loss to original purchase value. 

Small retail investors who were in for the long-run are disgusted. 

The CEO, however, is very excited for deal to go through. 

Why, one must wonder?

Simple.

A golden parachute of several millions of dollars, at a much higher value than what said CEO owned in the company through shares.

In short, it was much more worth it for him to agree to what shareholders considered a firesale so he could get a fat bonus cheque, contractually. 

Seven million reasons for the deal to go through.

But that’s not all!

The kicker is that the company bidding for the assets has very close ties to soon-to-be golden parachuted CEO and in fact the relationship used to be employer and employee. Coincidence ?! 

Moral of the story: acquiring company gets a deal, CEO gets a deal, and shareholders get a silly 20-30% premium on their lower priced stock. 

Hurray! Don’t you love being a speculator? 

Watch out for assets at sweetheart prices. This seems to be a common way that shareholders lose their shirts. 

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DISCLAIMER: None of this is financial advice. This newsletter is strictly educational/entertainment and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.