RE:RE:RE:RE:RE:RE:RE:Shorters die tomorrow...LaticelnExile wrote: Juice004 wrote: Lemerson, I took the point on the news release about using the proceeds to strengthen their liquidity position as debt repayments to reduce their annual interest expense and therefore increase net cash flows to improve liquidity. It would have to be lower than 9% rates to make sense.
The point that Lemerson has made is correct. The CInven deferral was at 8%. So why defer and pay 8% if they are, as you have suggested, reducing their annual interest expense? The press release makes no mention of debt repayment. This is additional debt. It is intutitive to believe that they couldn't convince Cinven to take an equity position in lieu of their earnout payment.
if they aren't issuing debt to pay off debt it is also intuitive to believe that their will be some major downward revisions to price targets. They were supposed to be able to meet all obligations and product launches from cash flows as they are firing on half a cylinder. If they are going to be paying more interest the sliding scale the analysts have been using will make a large difference to their target prices due to the leverage. I expect we'll see some $2-3 price targets in the coming weeks.