A Buy, a Sell, and some chatter about Bitcoin

Friday File thoughts for the Irregulars

By Travis Johnson, Stock Gumshoe, December 6, 2013

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First, let me welcome all of the new members who’ve joined us during this week’s charitable membership drive — you are wonderful people, and it is a delight to work for you every day. I am a little overwhelmed with just how successful our charity drive has become, we’ve now already surpassed last year’s total donation by more than 20% and we’re less than halfway through. Thanks so much for making this possible, and for helping to ensure that work continues here at Stock Gumshoe in the year to come.

What needs sharing this week? Well, we’ve had some news and updates on a few companies in our little Gumshoe Universe since I last wrote to you before Thanksgiving, and I also just sold a position that’s been on our watchlist for quite a while and also finally added shares of a stock I first suggested to our merry band of investors three years ago. We’ve also gotten dozens of queries about bitcoin, so I can share my thoughts on that … although I’m far from an expert on the subject.

Americas Bullion Royalty (AMB.V, AMBCF) is the stock I sold today. Not because it’s necessarily terrible (you can argue, in fact, that it’s now underpriced even as junior miners go), but because it’s no longer going to become the stock I expected it to be. I hope Americas Bullion is suing their lawyers for malpractice, because in exchange for a loan that they had only partially drawn down they apparently accepted horrible terms for what a “default” means and gave up to their lender the right to purchase their only really valuable royalty assets in the case of such a default (by “really valuable” I mean the ones that have a chance of becoming cash generators in the next several years). So they’ve been tied up in court for a few months trying to figure out if they will indeed have to sell those royalties — and apparently they were about to lose the case, so they agreed to sell their royalties for $22.8 million in cash ($35 million less the $10+ million they had drawn down in the loan agreement, the loan is forgiven now).

That means they no longer have any assets which have a good chance of generating near-term cash flow, in my judgement, and they have a lot of assets ...

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