Why the price is what it is Last night, I was talking to a ex-Hedge Fund Manager who also had an earlier career on the floor of an active exchange. I asked him what price he expected WND would be available at, today.
He said somewhere under $2.50. Manybe 2.40
I can see from the posts here that this not only gets a lot of you angry, but you are surprised and think it is illogical. If you are logical you are thinking:
Before: an official offer of $2.50 and take a hike
After: an offer of $2.50 and we get to keep Yabucoa.
But to a profession and to skeptical investors that is NOT the After. instead:
After: an official offer of $2.50 and take a hike... but maybe $2.50 without Yabucoa because Brookfield doesn' t want it.
There is no new official offer. Read the PR
https://tmx.quotemedia.com/article.php?newsid=57425222&qm_symbol=WND
There is a slightly better tentative offer that may or may not become official.
The Pros who own this stock, for the arb, are interested in how much cash they are going to get, how long they have to wait, and what risks there are that could reduce the cash to be received.
A "permitted bid" according to the WND poison pill is one that provides 60 days for the shareholders to make up their mind. That makes the $2.50 to be received in 2 months+ to be worth less than $2.50. Unless there is another OFFICIAL offer, from Brookfield or someone else, it is still $2.50 in cash.
But you get your money NOW if you sell in the Market, so they are still selling. You may get your money if you tender to the Official Offer but there are big doubts in that because WND's appeal to the OSC may preclude Brookfield from taking up any of the tendered shares.
If the tentative offer becomes officia, you get 2.50 in a couple of month and perhaps you get something for Yab, but that is not yet a sure thing.
For those assuming that the new tentative deal is real, or will be soon, we are faced with estimating the risk-adjusted value of Yabucoa, today. We don't know what WNDs plans would be and some of you are even speculating that Jeff will keep his job and run Yabucoa. That would be a logical possibility until/unless we see an official WND PR saying Yabucoa, if not bought by Brookfield, will be sold to someone else, for the best price possible, after financial close.
Unless there are details about what it will take to get to financial close and how long it will take, the pros will discount the value, severely and discount the value of the deal for how long it will take to get the actual cash in hand. They will assume it is worth pennies.
BTW, I tend to agree with REDUCE (for a big change) that Yabucoa could be worth as much as $1.50 per share of WND, although I don't have hard enough data on that to be confident. If WND released recent data or cited comparable sales of solar farms at financial close in order to substantiate a high price, chances are the share price would climb, at least once the new tentative approach becomes an official offer.
I am sure that Jeff and the rest at WND and Rothschild are busy today trying to get an official offer to sell all of WND assets, either in pieces as a whole. I believe that Jeff and the Directors will do what they can to get shareholders the higher price for all the assets. That's why I bought more shares yesterday. But I think it is a good idea for WND to reiterate this position and say that Yabucia will be sold, not operated.
There needs to be more public information about Yabucoa value available and anOffici improved Officialoffer for the share price to move up significantly and stay there. It would seem wise to release the Rothschild tire-kickers from their standstill agreements and let them make public offers at this point, given that Brookfield is doing it. I would not be surprised if all this was in progress now, as I write, because Jeff and his people have been running around doing whatever is needed to scate up a better deal. .