Why Silver Wheaton Corp. Dropped 11% on Tuesday
Wednesday, July 8, 2015 at 05:45PM
Silver Prices

On Tuesday Silver Wheaton Corp. (TSX:SLW)(NYSE:SLW) dropped from the previous day’s close of $22 to $19.70, a whopping 11%. What caused the drop? The Canadian Revenue Agency (CRA) is proposing to reassess Silver Wheaton relating to income earned by the company’s foreign subsidiaries outside of Canada. The CRA thinks the tax should be increased for the 2005-10 taxation years.

Although Silver Wheaton is not required to pay anything right now, the estimated increased amount is a scary $715 million. Compare that to Silver Wheaton’s current market capitalization of $8 billion.

The CEO’s view

Randy Smallwood, president and chief executive officer of Silver Wheaton, instilled confidence in the shareholders by saying, “We remain confident in our business structure which we believe is consistent with that typically used by Canadian companies, including Canadian streaming companies, that have international operations.”

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