RE:I also called IR on FridaySo everyone had fair warningthis was likely to go down, by Colossus' news release. Still tough pill to swallow for shareholders. Like I said I've been there before, that's why I only bet on the notes here. I think this is a better deal for the noteholders than Arias's last ditch funding attempt, where he tried to vault ahead and subordinate noteholder debt.
I just can't believe the notes traded so cheap compared to the shares in the last trading days. Its crazy - I think my math below is good, and illustrates the arbitrage:
For some perspective, say someone put $10,000 into notes at $10/note during the last trading days, compared to $10,000 in shares at $0.04.
The note buyer would hold .1333 % of the notes, or 0.0686% of the company. At a $50 market cap (arbitrarily usedby the company for valuation of the $4M bridge loan) that is $34,300 worth of shares.
The stock buyer would hold .142% of the old share float. Converted by the 1.7% exchange, would equal .00242% of the new shares, or at $50M market cap, $1,210 worth of shares.
fairfax1 wrote: I called early in the AM and inquired about the noteholder group and possiblity of default, since it was Jan 10th.
Was told the noteholders were finishing up a meeting on Fri. and news would most likely be "early next week".
I don't have an optimistic view for shareholders.
1) The cancelled noteholder meeting was clearly the meeting where noteholder terms were to be amended quite harshly. Unlike many half-a$$ news stories who are concluding that the last-ditch 1.7%-equity dilution proposal was abandoned - I don't think that is the case at all. It was this meeting that was cancelled:
https://www.colossusminerals.com/media/Press-Releases/Press-Release-Details/2013/Colossus-Minerals-Announces-Proposal-to-Amend-Gold-Linked-Notes/default.aspx
As for the cancelled shareholder meeting, like others on this board I have no idea what that is.
2) To me I think the most likely outcome is the1.7% dilution. Not sure what else that entails. That was the last substantial news release we heard about and to me I speculate that is exactly the deal being hammered out.