RE:RE:RE:Placement set to close Oct 26 or earlier...blueboy wrote: I will admit that pricing the PP above the current share price isn't normal. A couple of things that can make this work:
1) if investors feel that the stock is undervalued at current levels and they want to purchase large volumes of shares (the PP is for 20 million shares), the only way they can get that many shares without driving the share price way up is by PP. With most days trading at (above or below) a million shares, buying millions of shares would make the price rise more than the buyer would want.
2) The warrants are only priced at 0.35, which is less than a double from here. With Namaste's current revenues, new partnerships, and MJ selling possibilities, it is very likely that N will be MUCH higher than 0.35 in two years from now (the duration of the warrants) or less. The fact that N put in the clause about forcing the exercising of the warrants if N gets and stays above 0.70 (a double, for the warrants) shows that the company feels the share price has a very realistic chance of getting there
3) Notice that each unit includes a FULL warrant and not a half of a warrant. Typically in PP's, investors only get half a warrant with each unit, so if they buy 4 million units, they get 4 million shares and 2 million units. In THIS PP, if investors buy 4 million units, they get 4 million shares and 4 million warrants, making it much more attractive to investors.
Certainly, nobody would buy the units at 0.25 if they weren't very sure (or as sure as they can be) that the share price would go up from here (not only above the 0.25 unit purchase price but also above the 0.35 warrant exercise price.
For large investors like this, you can bet that they had lots of questions for Namaste management and they would have had to like the answers they received or they would not be purchasing the units. If / when this PP closes on time, at the 0.25 price, I read that as a VERY positive sign for Namaste.
Thoughts anyone?
BB
Nobody could have explained that any better. The warrants are the main reason why investors are going for it. But driving the price up for 25 million shares isn't what theyre after. It's a no brainer.