RE: baystockHi Baystock!
You made a couple of statements in your last post that are not necessarily correct.
As for assuming that all FSR shareholders will opt for the cash, that is unreasonable. Most of the people holding FSR I would imagine are there because they want leverage to silver. Opting to sell FSR for cash to buy cheaper FR shares was a good strategy before the closing date for the transaction. For those who wish to do so now, they will only get half of the cash for the transaction in December, and by then if they are silver bulls, they will probably find that FR is trading much higher than it is right now. So that strategy makes no sense. Also, you assume that all FSR shareholders are pissed with FR. Again, I think many would be quite happy to get the FR shares in the swap and ride higher on a much stronger company.
Speaking for myself, I bougth FSR just for the swap, and then sold to buy FR in the market before the deal. Either way, I would have taken the FR shares and consider the short term weakness a temporary buying opp. I suspect there are many others like me with the patience and confidence to wait this out. Your post assumes that everyone is pissed off and nobody would be happy to ride FR.
Secondly, you assume that FR will not have the cash available and must issue a PP. Again, that is in error based on your first assumption. IF FR does not have to issue the cash in December for the entire takeover, then they will probably not fall short of the cash they need. But lets just assume they do need to raise some short term money. The way the market works right now, a company like FR probably has offers on the table for cash from many sources. They could swing a bought deal with an institution for the entire amount they wish to raise. For an example, look at what WLF just closed last month to raise $16 million or so, all with a single party. QGX last year closed at deal to raise several million by selling a PP directly to Barrick Gold, and that option is also open to FR, to find another senior miner that wants a direct equity stake. Also, they could opt for a loan transaction from a venture capital company, and have the deal pay for itself out of cash flow generated by the acquisition.
The bottom line is you are entitled to your opinion. I know GSC was shorted into oblivion a year ago, and then the shorts were let off the hook in a huge placement deal, which pissed me off so much I sold the stock and never looked back. But I think KN buying shares in the market right now is sending the right message, and he is not stupid, given the success he achieved with First Quantum earlier in his carreer. I am pretty sure he is looking one or two jumps ahead of the market, and this guy will not let a few hedge funds steal his lunch.
cheers!
COACH247