GREY:CRIUF - Post by User
Comment by
agoldbloomon May 17, 2016 6:01pm
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Post# 24882888
RE:RE:RE:RE:KWH.UN
RE:RE:RE:RE:KWH.UNSome thoughts....
(1) I really like that ownership will be 100% in the hands of the trust. It's been an issue for equity ownership from the start. With 100%, management can do things without running them past minority stakeholders.
(2) Being non-dilutive isn't necessarily true. It's being done at recent highs, but not for a set amount of money, rather a relative amount of value of their equity. It would be different if they said we're paying $200mill for the stake and the previous owners are out....they're not. They're being given equity in an entity that they don't want, hence (3)
(3) There will be selling pressure as a result of this transaction. Previously, the owners had only one potential purchaser - the trust. Pawning off to an outside buyer would be next to impossible given that the company is(was) partially public. Now they're getting 70% in readily saleable shares - which they will sell as soon as any lockup is done.
If the markets are smart, the share price will drop to the issuance price tomorrow. If they're really smart, they will drop more because of the pending shares being available for sale. All IMO.