Aurum1983 wrote:guys, I see so much discussion on this bought deal and a lot of you are not understanding this. This is my attempt to shed some light for some of you.
first, BMO is not going to be holding the shares. They just collect the 1 - 2% fee to underwrite this deal for their clients. But still, if they are doing this it is a vote of confidence since no one wants to underwrite a deal that they don't believe have sufficient interest at said deal price. BMO will likely be able to sell the whole batch (72M shares) and some more on short (another 10M shares in over allotment option). If the price goes up, BMO will exercise the option and cover the short. If price goes down, BMO will cover the short from the market to stablize the price around .31. BMO does not risking losing anything. This is taking place on Feb 19 so we are going to hang around .31 for awhile. This also represents a ~11% dilution. I expect the deal will be done with full over allotment exercised, like the last deal.
Don't overthink this. It is simple as that. We have smart money (not BMO) betting big on FIRE. As much as we hate loan sharks like MMCrap but they are smart money - i.e. they wouldn't be here if they don't think FIRE can pay off those debentures with interest or if they don't believe the share price will go up after this bought deal. That's the primary way a growing company gets cash for equity in order to, well, grow. It is a necessary evil. We won't be needing them once we turn a profit and have access to better credit facilities.
If you believe in the fundamentals, undervaluation and outlook of FIRE which I think the majority of us here do, the best thing you can do is buy more at .31 to not get diluted. Give it a week for everyone to rebalance their positions and wait for the big news which I am sure is being worked out behind the scene. Two bought deals back to back clearly something is cooking. Increased target price all around. We apes are clearly not going to be the only hands in this. Sorry for the bagholders from pre-2020 but it is even more important that you buy more now (if you still have some dry powder left) It doesn't get better than this as we are moving in about the same price as the sharks.
All in all, we are primed to move up in a big way. But patience is required.