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Strategies & Market Trends : Value Investing

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From: Bordeauxman	12/7/2010 11:39:46 PM
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re Gst (Gastar) Perhaps the reaction to the announcement of the sale of an additional 12 M shares at 4.00/sh was a bit overdone. (Unless there is something else not announced.) Since GST was 5.27/sh at the close yesterday, the company was worth 5.27 x 50.38 M sh outstanding = 265.5 M. OK, perhaps that was a bit high, maybe 5.10 x 50.38 = 256.9 M. Selling an additional 12 M sh at 4.00 (I'd like some of that) for 48 M shouldn't drop the price to $4.35/sh at the close today. They didn't give the shares away, they were sold for $48 M. That adds to the company coffers. So now, all things being equal, the GST value should be (256.9 + 48 M)/(50.38 + 12) = 4.88/sh. I'm a buyer at $4.35. -Bordeauxman

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