GREY:EGDFF - Post by User
Comment by
Kantenahon Dec 23, 2010 3:03pm
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Post# 17889859
RE: RE: Bought Deal
RE: RE: Bought Deal
DoubleMan, I respectfully disagree with your assessment of the PP. I support management in continuing their aggressive growth strategy. The quicker they can increase their rig count, the better it will be for shareholders.
$3.70 per share is a fair price for the PP based on recent market performance. Actually, I think that management timed the PP perfectly to take advantage of the recent run in the SP. Had they tried this six months ago, they would have had to double the dilution to raise the same amount of cash.
I'm never a big fan of warrants, as they can sometimes act an an anchor for a stock. However, given the fact that the warrants cannot be exercized until we hit $4.50 (an 18% premium to the current SP) I don't think it will act as a drag for EGD. And I'm quite OK with having a little over $40M shares outstanding. Compared to many of the other small cap drillers, it's peanuts!
Now, the pressure is on management to leverage this investment and generate value. I continue to bet that they will pull it off. Time will tell.
All IMHO
-K