GREY:MBLKF - Post by User
Comment by
uter666on Jun 03, 2010 11:38pm
605 Views
Post# 17157480
RE: Can anyone explain....
RE: Can anyone explain....This tells the whole story.
"As at March 30, 2009, the Corporation has issued and outstanding CDN$141.7 million (US$138.9 million) principal amount of 10% senior secured debentures, 327.3 million common shares and 243.8 million warrants. Each warrant entitles the holder to purchase one common share of the Corporation for CDN
.50 until 2015."
These recapitalization transactions were basically an unofficial bankruptcy. The debt holders became the equity holders and the original equity holders got diluted out of existence. Any positive move north of 50 cents will be met with strong selling pressure from the 327.3 M or so 50 cent shares. Also, even if MB has incredibly good earnings and the SP goes above 50 cents, all the 243.8 M warrants will be exercised and you will have even more dilution.
In short, I think MB's SP will at best remains flat and at worst, go down as people get tired of waiting.