Post by
Xtrykr0 on Oct 17, 2011 12:05am
Why the price won't recede from here...
Everyone brings up good points here, but let's not forget that in the immediate term, Windstar is on the cusp of going online, and upon commercial energization, we will see this stock trading with forward P/Es similar to other company's in this industry.
AQN wants to takeover WND because it complements their portfolio, for those backbenchers of AQN, to claim that WND is a fart in the breeze would be just as much as an insult to AQN management as well for targeting WND in the first place.
Secondly, WND management will without a doubt fight hard to win back control of the company, but the question is at what cost. It will be a fine juggling act here as both sides races to accumulate majority shares as neither is in that position where the majority of the voting power I imagine is in the swing vote. Even with the 11m warrants and options exercised, WND management still does not have enough to hit majority, so I firmly believe that the "poison pill" is out of the question. Furthermore, initiating a poison pill would result in many disgruntled shareholders, which would throw all the swing votes over to AQN.
So what does this all mean? I'm speculating here, but I think what we'll have for the next 2 weeks is potential litigation and hopefully, some sort of conclusion from IIROC over how this takeover was handled. After that, should AQN and it's allies strongly want to proceed, we'll see a new price negotiated, probably in the sub $3.00 range. The question is, how fast can AQN swing the bat on this, as time is in the favor of WND management, because once even 90% of the turbines are installed, we will be commercially generating revenue from the 106MW of 120MW of potential of Windstar. And I'll quote WND's October 4th NR, they are indeed ahead of schedule:
"Western Wind Energy Corp. is pleased to annouce that the 53rd turbine was topped out this morning at 6:30 am. This is the last turbine of the first 106 MW, with a remaining 7 turbines (14 MW) due for erection in December, 2011.
The first 106 MW are now ready for pre-comissioning activities, with the ability to sell power in November, 2011, when the site energization is provided, by the interconnecting utility. "
Now, if AQN were to magically just "withdraw" their bid today, then yes, there may be a near term sell-off, but probably back to $1.65 or so, but I do not think so, considering the lock-out agreements made between AQN and Goodman & Co. Goodman would literally puke at the thought of going all in, then pulling back at this point. They would not profit a dime with the sell-off, it would be a blood bath for them.
Sit and watch. Let the pros do their thing, and let us retail investors that are still in this game just enjoy the ride.
Comment by
Xtrykr0 on Oct 17, 2011 10:11am
The EPS for Windstar and Kingman combined is .60 according to their corporate presentation. It'll be hard to tell what it is now as it is dependent on energy rates and yield.
Comment by
Xtrykr0 on Oct 17, 2011 10:41am
Not if you are using discounted cash flow theory.
Comment by
zooplankton on Oct 17, 2011 10:44am
"Not if you are using discounted cash flow theory."====================================They aren't, so my numbers stand.
Comment by
mm2m on Oct 17, 2011 11:03am
Fine - use your $ 2.00 based on cash flow which does not include the total anyway.Take the $ 200 M in cash grants and tax loss and this is about $ 3.33 per share based on 60 M sharesTotal $ 5.33 - amazingly close to the valuation and close to what LOM came up with ....You must be to smart for the rest of us dummies here