OTCPK:TNGZF - Post by User
Post by
tollmillingon Sep 06, 2016 10:44pm
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Post# 25212478
This Stock is Dead - And a convertable is on it's way
This Stock is Dead - And a convertable is on it's way A royallty company relies on issuing shares or debt to do a new deal.
GRC can not issue equity because it's it would be way to expensive to justiy he investment, so their only option is debt.
But any note they are able to float to a lender will almost certainly come with a 15% coupon and restrictive covenants. GRC's going return on investment money is 16% - clearly there is not enough of a margin of saftey to justify taking on that debt.
BUT most importantly, management must get paid; so in order to keep the lights on expect a debt equity hybrid like the last note, likley priced at 12% and convertable at 35c.