Cashing Up to get in on the Next Cheap PlacementI no longer believe that TST might do a public share offering at a highly discounted price. I agree cashing-up is prudent if you are overweight, but it would be to invest in something else, not TST.
Here is why I think the odds are against them doing a public offering that all of us could buy into:
- They have a shelf prospectus filed with the OSC. It says they did not involve an investment banking firm in preparing the document. (Don Olds used to work for TD Securities. He knows how to do these.) Why would they prepare that if they were going to turn around and have an investment banking firm prepare a public issue pospectus and find buyers to place the stock?
- They have been running a structured partnering process for about 6 months now. Would they really walk away from all that work and do no deal because the price is too low? Any partnering deal at all would involve some cash up-front. If they do walk away from all partnership proposals, could they re-start that process in future? My guess is no. Partners are people and they value their time. If you stiff them once, they probably won't come back.
- They have offered prospective substantial investors (not you or me) access to confidential data such as the market study, in return for signing a non-disclosure agreement. Like private equity firms. Like Caisse de Depot, or the Fonds (again) since TST is now a purely Quebec firm. TST has ready to go a private placement of common shares. But they have to go out the door at no lower than market price (per the prosectus).
My best guess is there could be a private placement. But you and I won't get to participate.