RE:Any SPB deep divers hereThanks for the feedback Schussing56
When someone dumps 13 million shares, it is never a good sign. However, I'm not convinced that M&B selling the 13 million shares represents an indictment on SPB but rather an astute trading opportunity for M&B.
My gut is telling me that the issuance of 48.5 million shares to the owners of the privately held Certarus is responsible for the drop in the share price of SPB. Not because of dilution, but rather due to the fact that the SPB shares have provided liquidity to Certarus shareholders.
If you think about the transaction from the perspective of Certarus shareholders, you would suddenly find yourself with the ability to cash out. Who knows how many years those shareholders have had their money tied up because there was nobody to sell to.
The fact that the Certarus shareholders also received about $350 million in cash might dissuade some of the Certarus shareholders from selling right away, but there would definitely be some who would happily just hit the sidelines completely even if it meant taking a bit of a haircut. Nobody would blame them.
As an investor, I look for opportunities to take advantage of inefficiencies in the market. I haven't done my due diligence yet, but I think this may be one of those times.
When Enbridge bought out Spectra, the market punished Enbridge for a long time even though the transaction was a huge win for Enbridge. On the surface, the market was consumed by the fact that ENB's earnings were negatively affected as they had to consolidate the two companies into one. Thousands of jobs were terminated and terminating jobs is expensive to the bottom line until the process is complete. However, the real reason the stock got punched in the face was due to the fact that Spectra was an American company and suddenly its shareholders were the owners of shares in a company they didn't know (Enbridge) from a foreign company. Quelle surprise that the Enbridge share price dropped. After doing my homework, I loaded up on ENB shares at $35 and ended up selling them at $55 along with taking advantage of the quarterly dividend date inefficiency a number of times.
The takeaway here is that when shareholers suddenly gain liquidity and or get handed shares in a company they don't know, it is reasonable to expect a sell off. For how long? I dunno but it is going to take what it takes and 48.5 million shares is a lot of shares to chew through.
Will the Certarus puchase by SPB be akin to the Spectra purchase by ENB? I don't know yet.
What I do know is that the Certarus CEO bought 700,000 shares of SPB in the first half of this month. That could be a very positive sign.
Based upon the trading and the insider notes, it feels to me like the CEO of Certarus is simply mopping up shares being sold by Certarus shareholders, but I'm just guessing.
I'm more interested is who was the buyer of the 13 million SPB shares sold by M&B.