RE:RE:IN
I'm long at $0.50, but am concerned that we cannot calculate with any accuracy the dilutiveness of the Right's Offering based on the data from the release other than to assume it will be highly dilutive.
Why is that a concern - well, if we end up with somewhere between 700 - 1B shares, a consolodation will likely happen. On penny stocks, consoladations are ususally really bad news for the shareholders.
It is quite possible the Right's share offerings will end up being above market value, making the Right's worthless.
The Company will have to pay 8% pa over 2 years just to have access to the $200M Line of Credit. My math says that is another $32M headwind to net earnings. If they actually use that Loan, its 12-14% pa depending on how much they use.
This seems to me to be a very good way to takeover the Company and its in-ground assets for a fraction of its worth. If WZR becomes insolvent, who gets first crack at the assets - the debt holder.
All the above in my humble opinion of course.
Your thoughts ?