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Coeur Mining Acquires SilverCrest! What Happened to the Stock Price?

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Written by Timothy Sykes Reviewed by Jack Kellogg Fact-checked by Ellis Hobbs
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Amid mounting market pressures, Coeur Mining Inc. experiences a downturn with stocks trading down by -3.24 percent on Friday.

The Latest Developments on Coeur Mining

  • Coeur Mining, Inc. penned a definitive agreement to purchase SilverCrest Metals for an estimated $1.7B.
  • Following the acquisition announcement, Coeur Mining’s stock witnessed an 11.6% dip to close at $6.26.
  • Another report pinpointed a 7% slide, dropping the stock price to $6.58, leading to questions on market confidence.
  • The acquisition’s strategic rationale is now under scrutiny, with investors reacting quickly to the unfolding events.
  • Analysts and shareholders are evaluating potential synergies against the immediate impact on stock values.

Candlestick Chart

Live Update at 16:03:30 EST: On Friday, October 25, 2024 Coeur Mining Inc. stock [NYSE: CDE] is trending down by -3.24%! Discover the key drivers behind this movement as well as our expert analysis in the detailed breakdown below.

Coeur Mining’s Financial Health: A Quick Look

Coeur Mining’s recent earnings disclose a cocktail of figures, each telling a part of their financial tale. Amidst challenges and opportunities, the company boasts a revenue close to $821M, though profit margins remain a concern with a negative streak at -8.33%.

The acquisition of SilverCrest came amid an environment of heightened scrutiny. The company’s key financial ratios, such as a total debt-to-equity ratio of 0.61 and a price-to-book ratio of 2.75, reflect a mixed bag of financial stamina. The cash flow statements reveal an operational cash flow influx of $15M, yet a free cash flow deficit of $36M after large capital expenditures.

Announcements show Coeur is aiming high, possibly hoping to capture new market potential with SilverCrest Metals under its wing. However, the immediate financial reports suggest a need for cautious optimism as integration costs and synergies materialize.

The News Behind the Numbers: A Closer Look at Key Articles

SilverCrest Acquisition and Market Response

Coeur Mining’s bold move to acquire SilverCrest isn’t just about expansion; it’s a gamble on future growth. However, with a near-immediate 11.6% stock drop post-announcement, there’s hesitation among investors. The acquisition cost of about $1.7B could stretch Coeur’s resources in the short term, reflecting a strong market reaction.

The allure of SilverCrest lies in its potential mineral resources, with Coeur seeing a longer-term strategy in consolidating their position in the metals market. The decisive maneuver aims to catapult Coeur’s influence, but strategists argue if this was the right moment, considering the current economic landscape and previous financial results.

Financial Results and Investor Sentiment

On the balance sheet side, Coeur’s total assets stand at over $2.1B, which might support their aggressive growth strategy. Yet, with long-term debt significant at $607M, any miscalculation in synergy benefits may lead to financial pressure. The debt servicing capabilities remain under watch, as investor faith could shake under high leverage ratios.

Past earnings reveal a sturdy revenue base, boosted by mining product sales. Yet, profitability remains elusive, with gross margins of 35.7% unable to counteract operating expenses which dent the bottom line.

More Breaking News

Stock Volatility and Future Prospects

Recent trading data mirrors the stock’s volatility with fluctuations across daily and intraday trades. For instance, shares oscillated between $6.41 and $6.52 on Oct 4, 2024, underscoring market variability and investor caution during periods of uncertainty.

Analysts ponder whether Coeur’s venture into SilverCrest will be a winning bet or a misunderstood ambition. Future outlooks hinge on operational execution, cost control, and the broader metals market recovery. The ability to harness SilverCrest’s assets effectively will decide whether Coeur rides a wave or faces a storm.

Conclusion: The Road Ahead for Coeur Mining

The hubbub surrounding Coeur Mining’s acquisition of SilverCrest Metals is a testament to the unpredictability of the resource sector. Navigating this course requires sharp foresight and managerial effectiveness. The company’s recent financial reviews, loaded with both promise and pitfalls, suggest a delicate balance to uphold investor confidence. Ultimately, monitoring integration success with SilverCrest and observing broader economic trends will be crucial as Coeur forges into new territory.

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The available research on day trading suggests that most active traders lose money. Fees and overtrading are major contributors to these losses.

A 2000 study called “Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors” evaluated 66,465 U.S. households that held stocks from 1991 to 1996. The households that traded most averaged an 11.4% annual return during a period where the overall market gained 17.9%. These lower returns were attributed to overconfidence.

A 2014 paper (revised 2019) titled “Learning Fast or Slow?” analyzed the complete transaction history of the Taiwan Stock Exchange between 1992 and 2006. It looked at the ongoing performance of day traders in this sample, and found that 97% of day traders can expect to lose money from trading, and more than 90% of all day trading volume can be traced to investors who predictably lose money. Additionally, it tied the behavior of gamblers and drivers who get more speeding tickets to overtrading, and cited studies showing that legalized gambling has an inverse effect on trading volume.

A 2019 research study (revised 2020) called “Day Trading for a Living?” observed 19,646 Brazilian futures contract traders who started day trading from 2013 to 2015, and recorded two years of their trading activity. The study authors found that 97% of traders with more than 300 days actively trading lost money, and only 1.1% earned more than the Brazilian minimum wage ($16 USD per day). They hypothesized that the greater returns shown in previous studies did not differentiate between frequent day traders and those who traded rarely, and that more frequent trading activity decreases the chance of profitability.

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Citations for Disclaimer

Barber, Brad M. and Odean, Terrance, Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors. Available at SSRN: “Day Trading for a Living?”

Barber, Brad M. and Lee, Yi-Tsung and Liu, Yu-Jane and Odean, Terrance and Zhang, Ke, Learning Fast or Slow? (May 28, 2019). Forthcoming: Review of Asset Pricing Studies, Available at SSRN: “https://ssrn.com/abstract=2535636”

Chague, Fernando and De-Losso, Rodrigo and Giovannetti, Bruno, Day Trading for a Living? (June 11, 2020). Available at SSRN: “https://ssrn.com/abstract=3423101”