mdf commerce Ord Shs MECVF

A One-Two Punch

[AlwaysLong683]

From the Earnings Press Release:

The Corporation recorded a net loss of $4.3 million or $0.15 loss per share (basic and diluted) in Q1 FY2022 compared to a net loss of $1.2 million or $0.08 loss per share (basic and diluted) in the same quarter of FY2021.

My Comments:

I realize that MDF grew revenue by 10% vs. the quarter a year ago, but I don't think that will do too much to impress the market given the net loss of $4.3M is approximately 3 1/2 times larger than the $1.2M it was a year ago.


From the Acquisition Press Release:

To finance the payment of a portion of the Purchase Price and related expenses, mdf commerce has entered into an agreement with Scotiabank, as sole bookrunner, and Echelon Capital Markets, as co-lead manager, on behalf of a syndicate of underwriters (the “Underwriters”) under which they have agreed to purchase on a bought deal basis from mdf commerce 8,480,000 Subscription Receipts at a purchase price of $8.00 per Subscription Receipt (the “Offering Price”) for gross proceeds of $67.8 million. Each Subscription Receipt will entitle the holder thereof to receive, upon the satisfaction of certain conditions and without payment of additional consideration or further action, one common share of mdf commerce.

My Comments:

MDF closed yesterday at $8.58.

I realize that when you do a bought deal financing, you typically give a discount to the current share price, but ie seems a bad timie to do this when share price has dropped so much already - maybe could have waited until the share price significantly recovered, unless MDF doesn't think its shares are worth any more than $8.00 each at this time......?



Nonetheless, we shall see how investors respond to the above.......

[Dibah420]

"unless MDF doesn't think its shares are worth any more than $8.00 each at this time......?" There are always counter parties to every deal. In this case, the Caisse,  FSTQ, Pantheon etc.  They also have a voice in setting the price. MDF needed the money to conclude its acquisition. That's the way the market rumbles.

[BearBullBrian]

A company like this is like many: it has two prices, the price the investing market will pay, which reflects various degrees of enthusiasm at various times and the price the professional investing community is willing to pay. The professional community prices is almost always the lower of the two and it usually reflects a healthy dose of opportunism. Given all that and a top-notch management team