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TS03 Inc Trust Units TSTIF



GREY:TSTIF - Post by User

Comment by GoPats1on Jan 19, 2016 7:04pm
125 Views
Post# 24474420

RE:Forget the higher price raise

RE:Forget the higher price raiseWAY too simplistic...Let's assume that sometime in the future (3Q2016) the company needs to raise equity. Let's also assume the "use of proceeds" is to fund plant expansion. There were three mistakes the company made during the last round of financing: 1) they put units into weak hands who were known to short against warrants 2) the use of proceeds was basically to strengthen the balance sheet round and 3) they used a syndicate of third tier Canadian brokers (Desjardin, Laurentian, etc.). Under those circumstances, of course the issue would have trouble getting out of the box. Now, let's fast forward to 3Q2016. It is not a stretch to think that larger, more well known brokers (not just in Canada) are doing their work on this company as we speak. I would imagine that when the time comes, they will use these brokers in addition to the aforementioned and they better as hell put these new brokers in the top left corner of the selling syndicate. That would take care of point 3. Their use of proceeds would now be the expansion of plant capacity because of a growing order book. That takes care of point 2. Finally, they won't have to issue warrants as an attraction to get the deal done. This takes care of point 1. The order book will be oversubscribed, the syndicate of "real" brokers will be there to support the stock if necessary, and this may actually result in a "hot issue"!!!!!!
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