Greenfirst Forest Products Inc T.GFP

STOCK DOWN 52% - what is going on?

[Wisedreamer]

The convertible debentures were converted at $0.50 per unit and warrant at $0.60... Sweet deal for the insiders.... If rights are subscribed.... avg is 1.82.

[2young2invest]

Gosh, they bought all these mills at the top of lumber prices, what a fools.

[JayBanks]

  To be fair, when they made the purchase announcements the stock was only $3.18, so they bought when the price of lumber was $1157, it rose to $1670 about a month later, so not at the top, but high, currently it's $536. Lumber is down 54% from the purchase price yet the stock is only down about 26%, that's not overly terrible when your referencing a stock off it's commodity

[BobTheKnob2]

Good points above. The other thing to also consider is the rights offering and what impact it had on the share. This impact was expected. Think about it. The share price was $6.35 per share when the rights offering was made on June 29. Typically rights are offered at a discount to current value - this was no exception, even with the total of all three rights combined. The rationale is to get

[BobTheKnob2]

As seen by my caculations in my previous post last night, there is a large discount to the intrinsic valuation of the common pre-rights offering. There also is a discount being offered on the common if purchasing the rights at current values, as seen with this formula $0.165 + $1.50 = $1.665 per subscription receipt. Taking the reverse $2.16 - $1.665 = $0.495 risk arbitrage. This presents a

[Marketwhiz]

All great points showing the serious discount price of the rights and the common Of course dealing falling apart risk however truthfully what has me very intrigued that wasnt ,dntioned is that senvest (one of the smartest and biggest funds in the world) has backstopped the rights issue. Thats huge. Having rivett (ex fairfax financial head) running the show is the other. This is a perfect prem

[BobTheKnob2]

Absolutely. You hit the nail right on the head.

[Wisedreamer]

Thank you for the info above.  Can you please clarify if I buy the rights now for 0.22.... Then I can still get the common at 1.50 + .22 = 1.72?  When do I have to pay the $1.50?  Many thanks.

[Marketwhiz]

Correct will get notice to exercise within a couple days from buying this just made this even crazier today. Those who see it and have dough are going to make out very nicely https://www.newswire.ca/news-releases/greenfirst-provides-market-update-on-closing-of-acquisition-of-forest-and-paper-products-assets-818756137.html

[Wisedreamer]

I bought some at $0.22 my average from the holding and new will be $1.97.  Hope it works out nicely.  GLTA wherever you play!