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Investors Disown Barrick Gold Corporation (USA) (NYSE:ABX’s) Shares, Adding To The Management’s Concerns

Boston, MA 10/08/2014 (wallstreetpr) – Barrick Gold Corporation (USA) (NYSE:ABX) nears its 1 year low share price after the day’s trade on September 07, 2014. The reasons for such dismal rate in falling stock price are quite a few – failed projects, reducing gold prices, unsuccessful acquisitions, various issues related to corporate governance and so on.

Statistics Shows Growing Concern For Barrick

These all have summarily tarnished the image of Barrick Gold Corporation (USA) (NYSE:ABX), and dissuaded the investors from putting in bucks on the company. Invariably, net share value has depreciated almost 68%, thus causing serious damages to the future prospects of ABX. In a bid to reprimand for the debacles, ABX had sold mines, in the past and catered to varied cost cutting methodologies.

Gold Price Plummets

However, at present, future gains are too far-fetched! Back in 2011, gold prices fared at $1900/ounce. Currently, the price is staggering at $1200/ounce. Moreover, the demands for gold emanates from investors. In current scenarios, the investors show lesser appeals for investing in gold. Thus, it is predictive that since the investment demands for gold is reducing, the gold price shall also see its way, plummeting further downwards.

Production Cuts Affect Revenue Generation

Barrick Gold Corporation (USA) (NYSE:ABX)’s current strategy to bolster revenues were to sell off assets and notch up capital expenditures. This resulted in lower productions – the net production figures came down from 7.2 million ounces in FY 2013, to mere 6.0-6.5 million ounces in 2014. Lowering commodity prices and overall interests project that the falling trend would continue in near future, shelving the propositions for hefty capital investments, thus affecting the production scale, on a whole, by degrees!

Debts Reduce Profitability

Profitability is apparently non-existent; however, Barrick Gold Corporation (USA) (NYSE:ABX) revealed that it has a net debt hovering at a little more than $10 billion. It is comprehensible that the debts would pan out over a long term basis. The art of debt management would also affect the capitals earned, since a part of it would be foregone!

The shareholders are dreading this imminent peril, and hence, we can find an avalanche drop in the ABX’s share price, marred by dissuading demands for investment.

Published by Steve Hackney

Steve Hackney is a corporate finance professional with over 14 years of experience in cash management and investing. He earned a Bachelor of Science in Finance from Florida State University and holds a Certified Treasury Professional certification. Steve lives in Orlando, Florida with his family.

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