waterous distributions 1 the distributions will not be cash distributions. they are shares of SCR that the WEF owns. They own around 90% of SCR. the distributions will be capital returns that go to limited partners of WEF, like pension fund managers, and other institutions. this is the investors in WEF getting their return on investment and original investment back.
Those instituions will likely sell their shares of SCR when they get them. The result is the WEF will own less of SCR over time and the public will own more of it over time.
2 Watersous says he will not make these distributions for at least 2 years. This suggests to me that Waterous will do more M and A to create value. This might include divestitures or acquisitions. I also believe that Waterous will pay down debt at SCR and initiate a dividend. These actions should bring more interest to the shares of SCR and raise the valuation.
This was a lousy situation for PIPE shareholders. PIPE was used by Waterous as a vehicle to go public at the expense of current PIPE sharedholders, who were inconsequential in the process.
Waterous saw PIPE as particularly vulnerable to a reverse merger, given its small size, underperformance, and PE fund involvement (riverstone).
Like him or not Waterous knows how to exploit situations for his own benefit. In that sense being alongside him in an investment may not be the worst thing ever.