RE:RE:new math
JCSunsfan wrote: Fluff. Your numbers all make perfect sense in a world where SP is actually tied to company fundamentals. But with this company, the SP and fundamentals have been at a disconnect for a long time. Thats why the PP was so low. SP is low. The PP was made at a 20% discount to present market SP and then 6% costs added on. Man, that's expensive financing for SH, but its really cheap for those actually running the company. They do not have to pay it back, they do not have to account for financing cost in the cash flow.
They give some special people a good deal and take it out of existing share holder value. Why should they care, they are up 300% since spring. This always happens to me in investing. I do OK, but the really big one seems just out of grasp.
I just cannot understand why this amount of money. It's not enough for Florence. It's like trying to buy a house for $500k, having $100k for a downpayment and getting a loan for $50k. Its not enough, What's the point. If I am an lender or jr partner looking at Florence, why would I invest in it now? The valuation is set so low by the company itself.
There has to be more to this because on the surface it does not make sense. Maybe the PP recipients will also hold Bonds on Florence and part of the negotiations was also an ownership stake. I don't know. But there has to be more.
That PP had to get this company something more than just the cash.
Remember, management has said numerous times over the past few months that negotiations pertaining to Florence J.V. and financing are far along in the process. Could Russ have cut a back room deal with potential suitors, either JV or financial, to get them some easy money from the PP knowing full well that Florence is a go due to their participation? Maybe. Could it be something similar? Maybe. Bottom line is that it looks to be a go.