GREY:BXEFF - Post by User
Post by
Dave4444on Mar 29, 2019 1:29pm
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Post# 29555282
OK, here is my post from InvVilage, on why this is good news
OK, here is my post from InvVilage, on why this is good news 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.