OTCQX:HEOFF - Post by User
Comment by
Lazaroson Nov 14, 2018 7:36pm
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Post# 28976710
RE:H2O to acquire Texas operation, maintenance firm
RE:H2O to acquire Texas operation, maintenance firmOver 30% dilution for US$1m EBITDA. Insane. And this management team decides to do it now at $0.83, but not a month or two ago when they could have financed at a higher price with much less dilution.
I see their strategy and agree it can work, but they have to stop diluting us so much. At 55m shares, they need to make $550K in net earnings to generate $0.01 in EPS. Before this deal, we'd make $0.01 for every $400K in net. Prior to the Utility Partners acquisition, it was $210K for every $0.01. Why does EPS so much to me? Because for every $0.01 in actual positive EPS they make, they market might give us 20-30x that in share price.
I like the deal, but really dislike the way they are financing it.