{"id":105372,"date":"2017-10-18T07:15:26","date_gmt":"2017-10-18T11:15:26","guid":{"rendered":"https:\/\/depquebec.com\/?p=105372"},"modified":"2017-10-18T07:29:08","modified_gmt":"2017-10-18T11:29:08","slug":"metro-missed-a-golden-opportunity-to-do-nothing-in-2013","status":"publish","type":"post","link":"https:\/\/depquebec.com\/en\/metro-missed-a-golden-opportunity-to-do-nothing-in-2013\/","title":{"rendered":"Metro Missed A Golden Opportunity To Do Nothing In 2013"},"content":{"rendered":"<p>Someone at <strong>Metro<\/strong> must have kicked himself of lot of time. And for a long period.<\/p>\n<p>Imagine.<\/p>\n<p>Since it sold its network of 75 Sept-Jours depanneurs to Couche-Tard in 1987 for $ 4.3 million paid in shares, Metro waited patiently for the right time to sell them. They ended up totalling 20 M of A and B shares (half and half).<\/p>\n<p>Metro President and CEO \u00c9ric R. La Fl\u00e8che sat on the Couche-Tard Board and for 26 long years, a period of time during which the stock price was mostly dormant, Metro patiently waited for the right moment to sell as only Warrent Buffett would have done.<\/p>\n<p>Then, in 2012, the stock jumped: the year was marked by Couche-Tard purchase of Statoil Fuel &amp; Retail (SFR), making the company founded by Alain Bouchard the largest operator of convenience stores in Scandinavia in 2012 with the acquisition of 2,300 SFR service stations in June at a price of $3.6 billion, including debt (source: <a href=\"http:\/\/affaires.lapresse.ca\/economie\/commerce-de-detail\/201301\/22\/01-4613937-metro-vend-la-moitie-de-sa-participation-dans-couche-tard.php\">La Presse<\/a>).<\/p>\n<p>The Couche-Tard stock price then went from $29.85 to $49.28, a formidable increase of 66% over the year.<\/p>\n<p>In early 2013, after such a great year for investors, a genius at Metro took the decision to liquidate half of Metro&#8217;s Couche-Tard stock, namely 10 million shares at a price of $47.90 for a total of <strong>$479 million<\/strong>.<\/p>\n<p>Indeed, the transaction has been profitable: half a billion dollars is far from nothing.<\/p>\n<p>But unfortunately, the next three years were going to be the most profitable ever for Couche-Tard&#8217;s shareholders in the company&#8217;s history .<\/p>\n<p>The situation can be summed up as follows:<\/p>\n<ul>\n<li>Metro sells a block of 10 million shares on January 23, 2013 at a unit price of <strong>$47.90 CAD<\/strong>, for a total of <strong>$479 million<\/strong>;<\/li>\n<\/ul>\n<ul>\n<li>One year later (January 22, 2014), the share was worth $80.97 CAD, so the same block of shares was worth <strong>$809.7 million<\/strong>, or $330.7 million more;<\/li>\n<\/ul>\n<ul>\n<li>Two years later (January 27, 2015), the share was worth $139.80 CAD, for a block now worth <strong>$1,398 million<\/strong>, or <strong>$919 million more<\/strong>;<\/li>\n<\/ul>\n<ul>\n<li>Three years later (January 27, 2016), the share was worth $186.03 CAD, for a block now worth <strong>$1,860 million<\/strong>, or $1,381 million more! *<\/li>\n<\/ul>\n<p>In other words, Metro had only to wait and it could have sold its stock FOUR TIMES THE PRICE, $1.9 billion instead of $ 479 million, a massive additional gain of $1.4 billion for doing nothing (before tax)!<\/p>\n<p>In case you don&#8217;t fully realize how much money such gain represents: it&#8217;s the equivalent of two and a half years of annual earnings at Metro! Yes: what&#8217;s left after two and a half years of hard work, pain and misery!<\/p>\n<p>Should they have waited three little more years, after waiting for 26 years, they could have pocketed this huge fortune.<\/p>\n<p>Of course, it is easy to make such judgments in retrospect. And it should be added that, at least, Metro sold only half of its shares, not all of them.<\/p>\n<p>Metro indeed made a fantastic gain for the sale of only 75 depanneurs (after 26 years of waiting however) in addition to having gained a profitable business partnership with Couche-Tard. Yes, all this is true.<\/p>\n<p>But still! The fact remains that this particular decision &#8211; let&#8217;s call a spade a spade &#8211; was a $1.4 billion missed opportunity.<\/p>\n<p>This is an incredible amount, $ 1.4 billion! Lost just because of one small decision!<\/p>\n<p>Last week, Metro announced the sale of most of the remaining 10 million shares (now 30 million since the split) to finance the acquisition of drugstore chain Jean-Coutu.<\/p>\n<p>This is at least a good reason to sell, after the stock has risen 15 times (from $12 to $180 over 5-6 years) and has plateaued for two years.<\/p>\n<p>But as for 2013, the only thing that comes to mind is: &#8220;bad move&#8221;!<\/p>\n<p>&nbsp;<\/p>\n<p>* Note: the stock prices shown do not take into account the splits that occurred between 2013 and today.<\/p>\n<p>Source: <a href=\"https:\/\/ca.finance.yahoo.com\/quote\/ATD-B.TO\/history?period1=1451624400&amp;period2=1456808400&amp;interval=1d&amp;filter=history&amp;frequency=1d\">Yahoo Finance<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Someone at Metro must have kicked himself of lot of time. And for a long period. Imagine. Since it sold<\/p>\n","protected":false},"author":9,"featured_media":105373,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[223,1750],"tags":[1140,839,265,1434,1145,1141,246,1143,1409,1142],"class_list":["post-105372","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-newsdep","category-profiles","tag-actions-en","tag-alain-bouchard","tag-couche-tard-en","tag-eric-r-la-fleche-en","tag-eric-r-la-fleche","tag-gains-en","tag-metro-en","tag-missed-opportunity","tag-sept-jours-en","tag-shares"],"aioseo_notices":[],"jetpack_featured_media_url":"https:\/\/depquebec.com\/wp-content\/uploads\/2017\/10\/blunderofmetro.jpg","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/depquebec.com\/en\/wp-json\/wp\/v2\/posts\/105372","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/depquebec.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/depquebec.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/depquebec.com\/en\/wp-json\/wp\/v2\/users\/9"}],"replies":[{"embeddable":true,"href":"https:\/\/depquebec.com\/en\/wp-json\/wp\/v2\/comments?post=105372"}],"version-history":[{"count":0,"href":"https:\/\/depquebec.com\/en\/wp-json\/wp\/v2\/posts\/105372\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/depquebec.com\/en\/wp-json\/wp\/v2\/media\/105373"}],"wp:attachment":[{"href":"https:\/\/depquebec.com\/en\/wp-json\/wp\/v2\/media?parent=105372"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/depquebec.com\/en\/wp-json\/wp\/v2\/categories?post=105372"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/depquebec.com\/en\/wp-json\/wp\/v2\/tags?post=105372"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}