Lot of people upset here; not sure I understand why . . .Well I'm newer to the investing climate than many, so I'm sincerely hoping someone can explain things to me . . .
Many are mentioning the underwriter price of the bought deal, the $44.70, as if that price is what ENB is suddenly worth. But isn't that the discount price that the underwriters receive for providing guaranteed upfront financing? More important, the underwriters expect to make a profit on the sale of these shares, so how does that translate to fears that our shares are going to $44.70, or even less? I don't know what kind of profit the underwriters expect, but given that Enb closed at 48.16, wouldn't they be able to sell all their shares at, say, $1 less? If that were the case, then all things being equal, why wouldn't our shares temporarily drift down to that $47.16 level, and not to the $44.70?.
And as far as being dilutive, it's not as if they're not receiving good assets for their money . . . yes, there are more shares issued, but the company has more assets and greater income earning capability; ie the company via expansion is worth more.
Yet I know that shares have dropped after hours by 7% or so; is that a logical or illogical reaction? Are we facing major disappointment tomorrow morning, or a terrific buying opportunity?