RE:RE:RE:RE:RE:RE:RE:RE:What just happened ...puppymonkeybaby wrote: johnale wrote: I should clarify method - I bought all debentures - I meant if I converted all the fire.db I bought to fire - I essentially
doubled my shares.
I consider it all one in the same at this point - even though 36.5% will remain as a convertible.
the problem with buying debentures in order to sell at the time of opening is the time it takes to receive the shares in your trading account.
by the time you get the shares in your account the share price will implode and most likely be under 0.13 break even.
it'll be a race to the door to dump
I'm not sure why you would buy the equity then either if that's where you think the equity is worth.
I think 3x revenues is a decent valuation methodology given we don't have great insight into profitability. It's about where the street trades on average but there is big variability. The street has revenues at $74m next year. That would put enterprise value at $222m. Net debt post transaction is ~$100m. That leaves $122m in equity value. Shares outstanding post transaction is ~475m so that puts equity value at 26 cents. A lot of hand waving here.
That's a decent return from 19.5 cents but in that scenario, the "debenture package" is worth over 70% more and you collect interest and pressure hedgies to take off their debenture trade and cover shorts in the common.