RE:Warren Buffet and second tranchCons:
- dilution
- Unused portion of the line of the 2B line of credit goes from 1% -> 1.75%. This means 0.0075*2B = 15M additional interest over 1 year. Likely over 9 months only, so really only 11-12M.
Pros:
- A bit of additional capital. That's all I see.
Summary:
The WB name is already attached to the company. We don't need further dilution. The WB name effect is already in HCG without the 2nd tranch. To be honest, I didn't like the first tranch either, and felt is was unnecessary, company was turning around without it. Yes, SP went up in the short term due to the confidence boost, but cost us a long-term drop in earnings per share.
I feel strongly on this and plan to vote "no" in September.