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Re: Sprott Intends to Make Exchange Offers for Central GoldTrust and Silver Bullion

Posted: Wed Dec 30, 2015 2:13 pm
by stpeter
Phalanx wrote:
Pointedstick wrote: I sold it all and replaced it with Schwab's commission-free SGOL. Too much drama for my taste.
Yep, just did the exact same.
Same here. I'm sad to see GTU go, it was the best option before Sprott got involved...

Re: Sprott Intends to Make Exchange Offers for Central GoldTrust and Silver Bullion

Posted: Tue Jan 05, 2016 9:22 am
by LazyInvestor
What is this Management GREEN Card vote that they sent us?

Re: Sprott Intends to Make Exchange Offers for Central GoldTrust and Silver Bullion

Posted: Thu Jan 07, 2016 12:52 pm
by 6 Iron
I am undecided whether to sell now and be done with this, or tender my shares to Sprott, then sell them. Either way, I will probably use IAU as the eventual vehicle for this portion of gold. Anyone have a thought?

Re: Sprott Intends to Make Exchange Offers for Central GoldTrust and Silver Bullion

Posted: Thu Jan 07, 2016 1:30 pm
by dragoncar
I don't know what to do... Considering replacing gold with 1/3 of a 3x fund.  At least that gives me tax advantages.  I don't have physical but maybe I'd buy a little to account for the additional counterparty risk

Re: Sprott Intends to Make Exchange Offers for Central GoldTrust and Silver Bullion

Posted: Thu Jan 07, 2016 2:24 pm
by MWKXJ
Still holding GTU as I'm not sure how long it will take Sprott to assimilate Gold Trust.  The discount has narrowed from when I bought in at ~9% (it's now 1.5% last I'd checked) so I'm already ahead, but it is possible we could see a premium given the recent worries in foreign markets.  While a premium may never materialize, GTU did trade at a 29%(!) premium in early 2009.  Of course, if Gold Trust or Sprott get their way and the fund becomes a ETF then premium/discounts will be a thing of the past.

Recently voted both against Central's proposal to convert to a ETF and against Sprott's merger offer.  I want the GTU to remain a closed end fund.  Not sure what can prevent the merger or changeover to an ETF at this point.

Re: Sprott Intends to Make Exchange Offers for Central GoldTrust and Silver Bullion

Posted: Thu Jan 07, 2016 2:52 pm
by 6 Iron
The meeting for GTU shareholders Jan 15 appears to be to discuss terms for the merger/takeover. It appears to be a done deal. Based on this whole experience, I have little difficulty believing that Sprott may make this less than advantageous for GTU owners that hold out.

Re: Sprott Intends to Make Exchange Offers for Central GoldTrust and Silver Bullion

Posted: Thu Jan 07, 2016 8:07 pm
by 6 Iron
Not sure, but am a little concerned about this whole share exchange. Perhaps I am being a bit paranoid.

Re: Sprott Intends to Make Exchange Offers for Central GoldTrust and Silver Bullion

Posted: Fri Jan 08, 2016 8:39 am
by LazyInvestor
So what should we do? Sell?

Re: Sprott Intends to Make Exchange Offers for Central GoldTrust and Silver Bullion

Posted: Fri Jan 08, 2016 10:25 am
by Libertarian666
MangoMan wrote:
Libertarian666 wrote:
MangoMan wrote: That statement may be accurate, but has nothing to do with Sprott penalizing the holdouts, which is not possible.
Really? Please explain.
Your premise is that those who are 'conned' into accepting the proxy bid will lose rights they currently have with GTU when the conversion to Sprott takes place, correct? If the GTU unit holders who 'are smart enough to' avoid said con, how exactly will Sprott be able to penalize them? Unless you consider the unwanted conversion a penalty, which I will concede it is, but I think 6Iron was worried they would somehow be penalized in some additional manner. Can you elaborate on what additional penalty would befall those who are forced to convert that would not also be cast upon those who voluntarily give up their proxy?
Well, I'm not a lawyer or a securities expert, but it seems to me that once Sprott has control of GTU, they could force the non-converters out at a fixed price lower than those who sold. Sure, that might be illegal, but then their whole approach is of very dubious legality to me.

Re: Sprott Intends to Make Exchange Offers for Central GoldTrust and Silver Bullion

Posted: Tue Jan 12, 2016 8:27 pm
by dragoncar
So is this a done deal?  When is the conversion likely to occur?

Why is SGOL better than PHYS?

Re: Sprott Intends to Make Exchange Offers for Central GoldTrust and Silver Bullion

Posted: Tue Jan 12, 2016 10:06 pm
by dragoncar
MangoMan wrote:
dragoncar wrote: So is this a done deal?  When is the conversion likely to occur?

Why is SGOL better than PHYS?
Why is SGOL better than IAU, which has a much lower expense ratio [besides being able to trade it free at Schwab]?
I don't know, although there seems to be a bandwagon.  From what I can tell, SGOL is Swiss and maybe holds less paper?  IAU may be less tax efficient.

I mean, what's so bad about PHYS even besides the tax churn of redemptions?

Re: Sprott Intends to Make Exchange Offers for Central GoldTrust and Silver Bullion

Posted: Wed Jan 13, 2016 9:44 am
by Libertarian666
dragoncar wrote:
MangoMan wrote:
dragoncar wrote: So is this a done deal?  When is the conversion likely to occur?

Why is SGOL better than PHYS?
Why is SGOL better than IAU, which has a much lower expense ratio [besides being able to trade it free at Schwab]?
I don't know, although there seems to be a bandwagon.  From what I can tell, SGOL is Swiss and maybe holds less paper?  IAU may be less tax efficient.

I mean, what's so bad about PHYS even besides the tax churn of redemptions?
Being taxed at the collectibles rate?

Re: Sprott Intends to Make Exchange Offers for Central GoldTrust and Silver Bullion

Posted: Wed Jan 13, 2016 12:54 pm
by dragoncar
Libertarian666 wrote:
dragoncar wrote:
MangoMan wrote: Why is SGOL better than IAU, which has a much lower expense ratio [besides being able to trade it free at Schwab]?
I don't know, although there seems to be a bandwagon.  From what I can tell, SGOL is Swiss and maybe holds less paper?  IAU may be less tax efficient.

I mean, what's so bad about PHYS even besides the tax churn of redemptions?
Being taxed at the collectibles rate?
Which options do we have that are not taxed at the collectibles rate?

Re: Sprott Intends to Make Exchange Offers for Central GoldTrust and Silver Bullion

Posted: Wed Jan 13, 2016 3:53 pm
by Libertarian666
dragoncar wrote:
Libertarian666 wrote:
dragoncar wrote: I don't know, although there seems to be a bandwagon.  From what I can tell, SGOL is Swiss and maybe holds less paper?  IAU may be less tax efficient.

I mean, what's so bad about PHYS even besides the tax churn of redemptions?
Being taxed at the collectibles rate?
Which options do we have that are not taxed at the collectibles rate?
GTU :-(

And CEF, but that has a lot of silver too.

Re: Sprott Intends to Make Exchange Offers for Central GoldTrust and Silver Bullion

Posted: Thu Jan 14, 2016 7:22 am
by AdamA
Libertarian666 wrote: And CEF, but that has a lot of silver too.
Actually not a bad idea, though, especially if you don't hold a high percentage of your overall gold allocation in an ETF or close-ended fund. 

I just like these Canadian funds better.  They are more transparent and less susceptible to Wall Street shenanigans, IMO. 

Re: Sprott Intends to Make Exchange Offers for Central GoldTrust and Silver Bullion

Posted: Thu Jan 14, 2016 10:30 am
by Libertarian666
AdamA wrote:
Libertarian666 wrote: And CEF, but that has a lot of silver too.
Actually not a bad idea, though, especially if you don't hold a high percentage of your overall gold allocation in an ETF or close-ended fund. 

I just like these Canadian funds better.  They are more transparent and less susceptible to Wall Street shenanigans, IMO.
Yes, I have some CEF, but then I'm a well-known heretic with respect to the PP.  ;D

Re: Sprott Intends to Make Exchange Offers for Central GoldTrust and Silver Bullion

Posted: Sun Jan 17, 2016 10:12 am
by Libertarian666
So does anyone know what happens to people who hold GTU in a brokerage account? Even though I see that Sprott has taken it over and has exchanged units of Sprott Physical Gold Trust for GTU, my Fidelity account still shows GTU.

I guess I need to call Kingsdale Shareholder Services to find out what is going to happen.

Re: Sprott Intends to Make Exchange Offers for Central GoldTrust and Silver Bullion

Posted: Sun Jan 17, 2016 10:31 am
by LazyInvestor
I found this

As a result of the completion of the Merger Transaction: (i) GoldTrust unitholders received an aggregate of 4.4108 units of Sprott Physical Gold Trust in exchange for each unit of GoldTrust;

https://finance.yahoo.com/news/central- ... 00760.html

What does this come to? Are we being ripped off somehow?

Re: Sprott Intends to Make Exchange Offers for Central GoldTrust and Silver Bullion

Posted: Sun Jan 17, 2016 10:38 am
by LazyInvestor
with google finance end of day values GTU 39.42 / PHYS 8.94 = 4.4094

4.4108 * 8.94 PHYS = 39.4325 GTU

and

Net asset value per Unit $39.76

from http://gold-trust.com/asset_value.htm

so it seems they are converting to PHYS at a discount, which means we are kinda at a loss?!

Re: Sprott Intends to Make Exchange Offers for Central GoldTrust and Silver Bullion

Posted: Sun Jan 17, 2016 11:04 am
by Reub
I'm sticking with PHYS because at my age it helps after I've eaten too much.

Re: Sprott Intends to Make Exchange Offers for Central GoldTrust and Silver Bullion

Posted: Sun Jan 17, 2016 11:09 am
by LazyInvestor
This is how they calculated exchange ratio:

NAV to NAV Exchange Ratio

In connection with the Sprott offer for GTU, the NAV to NAV Exchange Ratio (as defined in the Sprott offer) is 4.3997 PHYS units per GTU unit. In addition, if the Sprott offer is completed each GTU unitholder will receive the Bonus Consideration (as defined in the Sprott offer) of an additional 0.0111 PHYS units per GTU unit. In total, if the Sprott offer is completed, GTU unitholders will receive a total of 4.4108 PHYS units per GTU unit.

For the purposes of the NAV to NAV Exchange Ratio, the number of PHYS units to be distributed to each GTU unitholder was determined based on: (A) the net asset value per GTU unit (as calculated, in accordance with GTU’s amended and restated declaration of trust, on the second business day prior to the expiry date of the Sprott offer (the “Expiry Date”); divided by (B) the net asset value per PHYS unit (as calculated, in accordance with PHYS’ trust agreement, on the second business day prior to the Expiry Date), including, in the case of GTU’s and PHYS’ gold bullion, the value thereof based on the London Bullion Market Association second fixing price for gold bullion on the second business day prior to the Expiry Date.

For the purposes of the Bonus Consideration, the number of PHYS units to be distributed to each GTU unitholder was determined based on: (A) U.S.$0.10; divided by (B) the net asset value per PHYS unit (as calculated, in accordance with PHYS’ trust agreement, on the second business day prior to the Expiry Date), including, in the case of GTU’s and PHYS’ gold bullion, the value thereof based on the London Bullion Market Association second fixing price for gold bullion on the second business day prior to the Expiry Date.

Source: https://globenewswire.com/news-release/ ... Trust.html

Re: Sprott Intends to Make Exchange Offers for Central GoldTrust and Silver Bullion

Posted: Sun Jan 17, 2016 11:38 am
by rickb
As of the close on Friday the NAV of PHYS was $9.00 and the NAV of GTU was $39.76, which is a ratio of 4.41777.

Apparently Sprott's calculation ended up with a ratio of 4.3997.

Since the $.10 bonus shares work out to .0111 they're apparently using $9.00 per share as the NAV of PHYS, which matches what they've posted at http://sprottphysicalbullion.com/sprott ... set-value/

Working backwards, they must be using a NAV for GTU of $39.5973, which is $.16 per share short of what GTU posted Friday at http://www.gold-trust.com/asset_value.htm

By my calculations, instead of a bonus of $.10 per share the actual net effect is a penalty of $.06 per share.  Times nearly 20M shares adds up to a little more than $1M.

Re: Sprott Intends to Make Exchange Offers for Central GoldTrust and Silver Bullion

Posted: Sun Jan 17, 2016 1:24 pm
by Libertarian666
rickb wrote: As of the close on Friday the NAV of PHYS was $9.00 and the NAV of GTU was $39.76, which is a ratio of 4.41777.

Apparently Sprott's calculation ended up with a ratio of 4.3997.

Since the $.10 bonus shares work out to .0111 they're apparently using $9.00 per share as the NAV of PHYS, which matches what they've posted at http://sprottphysicalbullion.com/sprott ... set-value/

Working backwards, they must be using a NAV for GTU of $39.5973, which is $.16 per share short of what GTU posted Friday at http://www.gold-trust.com/asset_value.htm

By my calculations, instead of a bonus of $.10 per share the actual net effect is a penalty of $.06 per share.  Times nearly 20M shares adds up to a little more than $1M.
So the big "bonus" is just as phony as the rest of their offering terms.

What a bunch of scumbags.

Needless to say, I'm going to sell my PHYS as soon as I get it, or sell the GTU if I can still do that at Fidelity.

Re: Sprott Intends to Make Exchange Offers for Central GoldTrust and Silver Bullion

Posted: Sun Jan 17, 2016 5:11 pm
by dualstow
Reub wrote: I'm sticking with PHYS because at my age it helps after I've eaten too much.
PLOP & PHYS?

Re: Sprott Intends to Make Exchange Offers for Central GoldTrust and Silver Bullion

Posted: Mon Jan 18, 2016 8:13 am
by LazyInvestor
It seems we won't have time to trade as the day of conversion is Jan 19. Today is some holiday so markets are closed.