OTCPK:DJACF - Post by User
Comment by
Extallioneson Jul 13, 2018 5:42pm
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Post# 28314920
RE:RE:RE:conversion.
RE:RE:RE:conversion. robertwfb wrote:
no one agrees to sell an Item for a floating price unless perhaps there is an escalator clause
They're purchasing Hiku with shares in Canopy. In order to do so, they need to determine how many shares they will issue to Hiku shareholders - the number of shares is effectively the purchase price - NOT a strict monetary value. The way they obtained the number of shares is by taking the 20-day volume weighted average prices of Canopy and Hiku - on the basis of those averages, they agreed that 0.046 was a fair number. Based on the averages, that meant they were valuing Hiku at $1.91. That does NOT, however, mean that Hiku shareholders are receiving $1.91 per share. They are merely receiving 0.046 shares in Canopy for each share in Hiku that they hold. The number of shares you receive will not change, so the "price" is not floating. However, Hiku's share price will move in lock-step with Canopy's until either the acquisition occurs, or a secondary offer is made. If you want to call that "floating", then yes, companies do it all the time.