RE:RE:RE:No kickbacks later: sponnyDibah42 - (5/26/2016 12:27:13 AM) RE:RE:No kickbacks later: sponny "In my opinion, dilution & pressure techniques from consortium of banks brought down the price but now deal is closed, no point in keeping pressure on by banks."
Let's think a bit clearly. If the consortium is trying to move stock to their clients that they bought at $3.10 why would they want to bring it down to below $3?
Sometime these conspiratorial theories get the better of us.
Dibah, you are correct. Not sure if everybody understand how a bought deal works. Banks, say RBC, commit to 60M$ or so. They then sell the financing/shares to their clients. If oversubscribed then the top clients will get the allocation (that is the real world). If not oversubscribed like apparently this one, then it is open to more/most of their clients who want in. So they have all interest in keeping the shares as close or even higher to $3.10 at least until the deal is closed to be able to sell the deal to their clients. Some clients had to pay $3.10 while they could have paid $3.00 in the market but some of those clients may be too big to buy in the market, some may accept to buy at $3.10 because they want to keep good relationship with RBC so that they get allocation for the next deal from RBC,.... There are different reasons why people would get on this deal. Of course these clients are not too happy and would rather see the price above $3.10. RBC and others have definitely supported the price by buying in the market over the last few weeks. How long will they support the price I do not know but not for 6 months that is for sure. If the market was to crash like last summer, PLI would more likely go down with the market (unless great news to come out from the company).
Hope this help clarifies how this deal works besause based on some comments I have the feeling not everybody understand the mechanisn.
For the record, I have been in the stock for only 6 months so did not buy in the pennies as some lucky you, but I am in for the long term and will definitely buy more if it goes down to the same level as last summer.
AR