RE:Why Caisse Investment Good for Shareholdersjamesb14 wrote: The new investment by Caisse de Depot will help unlock value for ALL shareholders, here's why:
1. Caisse isn't some corporate raider, they have a mandate to help make Quebec companies successful and keep jobs in Quebec.
2. They have a vested interest in seeing Bombardier Transportation improve on all metrics - good for them and for the shareholders (us) who own the remaining 70%
3. They've created a separate board with the ability to appoint directors - this is a great win for all shareholders and I can't understand why the critics of the board on this forum don't see this as a huge positive
4. Upgrades by bond agencies will come - with the influx of new cash over the past couple weeks we'll inevitably see the bond rating agencies upgrade Bombardier's debt. You cannot underestimate how much the cash crunch was hurting Bombardier's ability to win orders. These last two deals drastically reduce the risk and new orders will now start flowing in.
5. Cash is king - with new cash, Bombardier has the ability to focus on long-term growth. All the ridiculous media stories about the imminent death of the C-Series will come to an end and be replaced by stories of some serious orders.
There's no point in guessing the share price over the next day, week, month or year. My projections for 5 years (2020) have Bombardier making $0.50-$1.00 per share and being valued at $6.00-$15.00 a share. For that, I'm willing to hold and wait.
Your absolutely right on this point.... You cannot underestimate how much the cash crunch was hurting Bombardier's ability to win orders. These last two deals drastically reduce the risk and new orders will now start flowing in.