Investment Dealers Freaking OutMost will have noticed that the investment dealers who raise funds for exploration companies in the basin are almost unanimously pressing for a competing bid for FCU. The investment dealers didn't have a problem selling FCU issuance (over-subscribed) at .58x NAV or thereabouts, but now they're sticking to their much higher price targets for FCU. So why is that? Why did the investment dealers even just recently sell cheap FCU paper and now claim that FCU's merger price is too cheap?
Don't get me wrong, the merger price is too cheap but it also means that as TT has already suggested, the paper for the project down the road from FCU is wildly overpriced. Same for the other exploration companies in the basin, many of which the investment dealers have on their books.
Solution for the investment dealers? Re-rate the sector! Change the modeling! Starting today all exploration companies in the basin are trading for too cheap! And in the investment dealers market notes, it's what they say they're starting to do.