RE:DilutionTheWolfOfWLU wrote: Throughout the past few months I have read many reports concerned about short term dilution affecting long term growth. Expectations seemed to be that more shares would need to be issued, while in oversold territory, in order to keep creditors satisfied as interest rates rise.
this company is well capitalized - they won't need to issue shares to satisfy their debt payments at all.
both CRH and MyHealth were financed by cheap senior secured bank debt. the banks lent them only a fraction of the purchase price, with the rest funded with equity and options/time based earnouts. WELL just did a debenture raise which would probably cover all the time based earnouts and then some.
CRH and MyHealth are stable businesses with recurring cashflows - they will be able to make their debt payments. the banks monitor their loans quarterly at minimum, so if WELL defaults the market will know. banks aren't in the business of making huge corporate loans that are going to default in this short of a period of time.