RE:NEXG vs SGNLshiftyone wrote: When you take into account the debt and cash both companies have.
Both properties are being valued at right around or just above $50 million each.
Why are SGNL shareholders getting 29% of the newly merged company, and NEXG shareholders getting 71%? Almost 2.5 times as much?
When you factor in the 75 million shares SGNL will sell before, or concurrently to the transaction, current shareholders will get less than 29% of the newly merged company.
I can only guess that SGNL was in a much more desperate negotiating position.
I would have thought that SGNL shareholders should have received much closer to 50% of the merged company. But that is just me.
GLTA
Shifty, you show a poor understanding of the financial concepts you discussed in your earlier post.
It might be about right that both companies have projects valued at around 50M$, but one of them has debt while the other does not. If you have a debt free 200 000$ house with no debt and I also have a 200 000$ house with 100 000$ mortgage and we put everything together (houses and debts) in a merged entity, should we have 50-50 ownership or should it be more like 33-67 ?
The market might value each project at 50M$, but SGNL has debt that leaves it with a market valuation of 22M$ compared to NEXG at 57M$. So the 29-71 split is pretty close to how the market values each company without any discount or markup for either one. Today's trading confirms that it looks like nobody gets taken advantage of in this proposed merger.