GREY:MAAFF - Post by User
Comment by
pangloss81on Apr 09, 2009 8:47pm
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Post# 15909757
RE: RE: RE: RE: Jenings Capital Inc-sorry
RE: RE: RE: RE: Jenings Capital Inc-sorrySpeculating about price is dangerous--this stock has never really got the love it deserves. I think it should go beyond a dollar, but i dont want to count on that. I am resisting dreams about anything beyond a buck fifty...although i admit that sometimes i give in.
Moving forward, the sp hinges on how they will raise that much discussed equity. If they really do raise $160 million equity by issuing shares at 30 cents, as jennings assumes, that will give MAA something like 840 million outstanding shares (yikes). However, if the stars aligned in a better way and they raised it at 50 cents, then there would be around 580 million outstanding shares (diluted). i think that is quite possible, but maybe optimistic. Others on this board think that MAA can be more creative and find other ways to raise equity. Maybe more surprises are in store, such as the last news we got. I cant believe they would finance at 30 cents. All said, i would take jennings' approach as almost a worst case scenario (how could it really get worse?) However, i am worried that there might be some market manipulation to keep the sp down prior to raising equity.
I think to answer the question "what is your target price" is also to answer the question "how will they raise that equity?" If we end up having close to a billion shares outstanding, what kind of effect will that have on your shares? That is an obvious point, but a key one.
Other factors also come into play. The gas supply agreement gave us a good kick start, but we dont actually know the details about it. The news release really doesnt tell us much about what kind of a deal they got on gas. Such details affect target price.
Remember, there are also the other arms of MAA, and i dont think that they are being priced in. Cormark openly said that they did not include anything from Magenergy in their target price. Clearly the focus is on potash, but they do have other assets, which one way or another will add to the value of MAA.