Post by
seriousinvest on Jul 24, 2014 7:05pm
Shares upon redemption of the debentures
I have no problem getting shares in lieu of cash (although I would prefer cash). When it gets close to the time that the debentures must be repaid, it will be obvious(unless there has been some sort of dramatic change in the company's financial position) that millions of newly issued shares are going to flood them market and the stock will trade based on the assumption that there will be massive dilution. Since the debentureholders will get 95% of the then market value I am reasonably confident that it will approximate the face value of the debentures. The Common shareholders might not like the price at which the shares are issued to satisfy the debentureholders but the debentureholders will do fine. That is why I intend to vote against this transaction as a debenture holder. Frankly, I will be very surprise if this transaction is ever connsumated as currently structured. If the Board were serious they would have gotten the 2 big sophisticated shareholders to announce that they were voting in favor of the proposal. Either they did not approach them which I find amazing or they did and they were rejected. If that is the case this entire event is a waste of time and money unless management thinks this will cause a higher offer to be made. Of course, there has been more than enough time for a higher offer and it appears none is going to be forthcoming. The entire Board and management team should resign and let someone else try to salvage some value for the stakeholders.
Comment by
iroctsxv on Jul 25, 2014 9:48am
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Comment by
iroctsxv on Jul 25, 2014 9:55am
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Comment by
rad10 on Jul 25, 2014 12:58pm
excellent post serious invest - sad but true. This proposal is essentially a refinancing whilst maintaining jobs for the boys. Without LTS support this deal is dead in the water..............