Post by
PUNJABI on Aug 04, 2015 10:08am
Massive Dilution. Bad deal for present shareholders
155 million shares will be issued right of the bat. Then 1/5 @$1.40 &1/5 @ $1.80 that is another 31 million shares x 2 62million shares. Total dilution 217 million additional shares.
Present outstanding shares were only 193 million. Massive dilution for the present shareholders for a total funds of $300m.
The float is going to get very big about 410 million shares when & if all the warrants are exercised.
The good thing is that they will deal with the immediate issue of cash crunch from the placement money. Plus they placement is a very decent price.
But in the long run present shareholders will pay a heavy price. I think that it was a very bad idea for giving away 53 % of the company for small amount of $300 million.
They should have sold some assets for $200 million. This is a very bad deal for the present shareholders. The real winner in this deal is Maple Marathon.
There is only hold period of 6 months. If & when the stock goes above $1.40 & $1.80 they can short the stock.
Comment by
patenright1 on Aug 04, 2015 10:24am
Looks like Punjabi missed buying and is now bashing the deal. So let me get this straight, brining in $300M for 53% is bad when the entire company just yesterday was valued at a ridiculous $110M, ya sure sounds like a bad deal - you are off your rocker punjabi
Comment by
tsoprano1 on Aug 04, 2015 11:24am
I agree. I also would add that now we have someone with a lot of skin in the game that will make sure we succeed long term. I suspect eventually we will have a level of support that was missing recently. All things considered I think this is a win-win situation. May not get back to $6 but should get back to $4 more quickly. T