Obsidian Energy Ltd T.OBE

RE:RE:RE:RE:Receipts settling next week at 4.40

[oilypants]

Gunner Your post illustrates how dishonest posters are here. BNE got greedy fiction and revisionist history. Same posters pushed the deal. Lets keep this board honest good job Gunner!

GunnerG wrote: The last part of this post is hilarious.

BNE got greedy?  LOL  The BNE board never engaged with OBE and eventually told OBE to take a hike; and the majority of BNE shareholders agreed. 

It was OBE who extended the acceptance date, three times I believe, maybe four.  OBE also lowered the minimum tender to 50% when they saw their offer going nowhere.

LOL, BNE got greedy and OBE walked away.  ROF

JohnJBond wrote: The private placement process works by having several moving parts.   The two main parts are 

1. A manager (investment bank)

2. A group of buyers that will always say yes to an offer to buy into an IPO or secondary offering 

In order for 2 to always work several things must happen 

1.  The shares must be offered at a discount 

2.  The buyers must have access to money 

These two go hand in hand.    The buyers always have money ready to spend because they sell the shares they get.    Some sell them instantly by shorting.   The unwritten rule is don't do it until all the shares have been placed otherwise you won't be on the list next time 

This first layer of buyers passes their shares off to the general public.    Then they have money ready for the next offering the investment bank needs to place 

It amounts to a near instant gift of 10% or more to the lucky buyers.    The investment bank gets something similar out of it

The risk to the investment bank and their buyers is that the deal does not close

If that were to happen, thre investment bankers will try to find a way to make it close - so as to get their fee, and protect their buyers 

Once it's all over, trading returns to normal 

From the post announcement volume it seems many of these new shares have already been sold/shorted into the hand of the general public 

That general public is made up of long term investors and short term traders.    They will carry on as they did before

Most of the long term investors likely bought in a bit over a year ago when it was in the 30c range and have been holding ever since.    Others may have joined along the way.    The short term traders have come along once they noticed the prior price appreciation 

OBE appears to be tightly held, with the daily price moves driven by short term traders jumping in and out based on things like that weeks US oil inventory etc 

I do not expect a share price drop if the PROP deal closes and the receipts convert to shares.     I think most of those shares will be used to close out short positions within the same accounts 

If PROP doesn't close and OBE walks away, then we may see a short squeeze - or we may see a slow short reduction over a long period - or something inbetween 

This is not your average deal.   From the short closing period to the retroactive effective date back to July.    All of which shows how Loukas found a way around various obstacles

He has also set a precedent of walking away if the other party gets greedy (BNE).    The Chinese should know that and think twice before attempting to ask for more 

FYI waking away from the BNE deal may not of been popular with the investment bank community and may explain their lack of coverage or negative coverage