Shareholder activists are trying to unlock the NAV discount on GTU

[steve]

Central GoldTrust Unitholders Overwhelmingly Reject Polar's Self-Serving Proposals and Elect All of Central GoldTrust's Nominees to the Board


http://www.streetinsider.com/Press+Rele ... 13485.html

[Wooly Mammoth]

Central GoldTrust Unitholders Overwhelmingly Reject Polar's Self-Serving Proposals and Elect All of Central GoldTrust's Nominees to the Board


http://www.streetinsider.com/Press+Rele ... 13485.html

Yay! (I think ...)

[Libertarian666]

It's interesting that Polar got almost 1/3 of the votes for their redemption proposal, whereas management was supported overwhelmingly in every other issue.

That means that quite a few unitholders would like such an option, presumably because it would narrow the discount.
This also means that if the discount stays very high for very long, there will be further proposals like Polar's or Sprott's, which will narrow it again due to the arbitrage possibilities. We've already seen it cut in half in recent days for this reason.

So I'm going to keep buying GTU with my extra cash flow as long as the discount stays around.

[dragoncar]

It's interesting that Polar got almost 1/3 of the votes for their redemption proposal, whereas management was supported overwhelmingly in every other issue.

That means that quite a few unitholders would like such an option, presumably because it would narrow the discount.
This also means that if the discount stays very high for very long, there will be further proposals like Polar's or Sprott's, which will narrow it again due to the arbitrage possibilities. We've already seen it cut in half in recent days for this reason.

So I'm going to keep buying GTU with my extra cash flow as long as the discount stays around.

Game theory here.  What I really want is no redemption option (to keep costs down), with the appearance of a redemption option being inevitable if the discount gets bad (to minimize discount).  So if I somehow knew polar would fail, I would vote for the polar proposal, in the hopes this causes the discount to stay small.

Not sure what to do about Sprott, though.  Best case would be for them to offer to buy individual GTU shares at NAV.  That's like a tax-free (for the fund) redemption option.  They would gain nothing from that, but I don't see what they gain from their current proposal either.