Will the share price of Bill Beament’s Northern Star Resources Ltd [ASX: NST] fall below $10 as happened after the release of the financial results for the FY2019?
Market observers forecast NST drifting down and their share price going below $10 if the gold price falls. Bill Beament’s poor judgement calls and decisions, and recent acquisitions contribute to the fluctuation of NST’s share price.
Beament’s NST one of the worst performers on the ASX shares index
NST was the best performing share on the ASX for the last decade. But such dizzy heights do not continue forever. The mining industry is full of industry darlings, from Poseidon to Sons of Gwalia, that has now disappeared.
Shareholders were concerned when the gold price and the shares of Beament’s ASX listed Perth-based gold miner were significantly put under pressure last August 14. NST’s share price tumbled 7.5% lower to AU$12.11 becoming one of the worst performers on the index.
The shares of the Beament-led gold miner took another dive 6.62% to AU$11.57 on August 27 after financial results for FY2019 were posted.
2020 off to a good start
With the Share Purchase Plan (SPP) to raise $50M due to close on 24 January 2020, the NST share price has rallied nicely to around $12. NST has raised $765M and aim for a further $50M from the SPP – this will issue over 90M shares into the market. Effectively diluting existing shareholders.
Sell or buy?
A decline in the Northern Star Resources share price may be a portent of things to come. With reduced cash reserves and shareholder dilution a dip in the volatile gold price will likely lead to falls in the NST share price and prospects of future dividends diminishing.
Declining share prices affect shareholders’ confidence in the long term prospects of the company and the credibility of Bill Beament, NST’s Executive Chairman.
Observers predict that investors will choose to sell rather than buy low from Beament’s NST, opting for trustworthy and high-performing gold companies that will pay fully franked dividends.