Bellatrix Exploration Ltd (Canada) BXEFF

OK, here is my post from InvVilage, on why this is good news

[Dave4444]

Dang, I did the Math. and at these price it says BXE is a big buy, here is why:

Assume you have a company with $500 million in debt and a market cap. of $50
million with 100 million shares outstanding at 50 cents a share. The market is
valuing the companies assets at $550 million (debt plus shares).

Now the company makes a deal that reduces debt by $100 million, but causes 100% dilution.

So now the company has $400 million in debt, 200 million shares outstanding and still
has assets worth $550 million. The result being $150 million of the value is now in
the shares and so $150 million divided by 200 million shares gives the stock an expected
price of 75 cents per share. A 50% gain in share value.

Yet in a knee jerk reaction, the market sells the shares down to 40 cents.

[Dave4444]

Think of it this way, at yesterdays market cap. they would have had to sell at least 2X the outstanding shares to pay off $100 million of debt.  Instead they managed to pay off $100 million of debt by issuing only 1X the outstanding shares. Essentially the debt holders bought BXE shares for at least $1.00 per share.  

[honeystivbators]

This post has been removed in accordance with Community Policy

[greenpasture1]

This post has been removed in accordance with Community Policy

[Don2018]

Hahaha, are you ever stupid !!!!!! You have no idea how these transactions work, do ya? What an idiot!

[Don2018]

My vote for most idiotic post of the year. And the fool actually went out and bought BXE on Friday even as people were telling him he was posting nonsense. I wonder how much that clown lost on that dummy trade?

[backforty]

I'm too lazy right now to verify some of the numbers but at a high level, I agree with it.  Your analysis is interesting - let's see what next week brings.  

[greenpasture1]

This post has been removed in accordance with Community Policy

[ariesleaf]

HOW is that good for shareholder's now.? DILUTION pushes up the ACB.

[Just1Question]

Seems like they issued shares for a higher price than market: Re Senior Unsecured Notes:   41.26M Shares for $47.8M so $1.15 per share Re Second Lien Notes (2021) 26.29M Shares for $62.2M so $2.36 per share Not sure if this is right but that is what it looks like to me.

[Holdernko123]

totally wrong!!!

[Don2018]

Hey douchebag, when are you going to apologise for misleading people (and being a moron)?