RE:RE:RE:RE:RE:RE:Quipt Home Medical to Participate at the Sidoti Virtual It's altogether too mysterious. I doubt they had no plan or pipeline when they - loudly - touted it. Something interfered with what they expected to happen because, as you say, the raise, or its size, makes no sense otherwise. Management does not want to show all its cards, but we deserved some explanation if developments were not to go as planned. I suspect COVID-related roadblocks.
Carlito3311 wrote: jtmoney - you are precisely correct here. The dilution was crazy given they had no pipeline or plan on acqusitions...just a couple rinky dinky deals. should have done a smaller raise.
People forget that having $30 million sitting on the balance sheet is not a neutral event. It is value destroying. The company's cost of capital (equity and debt) is well north of 10%, so having cash sit idle in the bank earning 0 or 1% destroys value...at minimum $3 million a year.
Companies are supposed to fund projects that exceed their cost of capital...that's the only way value is created. Idle cash is a sign of mgmt incompetence.