ACAS has made a huge step in the right direction if the stock price continues to act positively to the this morning's offering.
Off the cuff, NAV will decrease from $8.29 x .80 = $6.63 taking into account the dilution from the new shares.
That is the closest the stock price has been to NAV since the market crashed. We need another dollar improvement for the company to be free to offer the stock necessary to raise the remainder of the cash to resolve the debt issues without ever having to sign the rather unattractive debt refinance they negotiated.
This is the biggest positive development since the covenant violations occurred.
Best wishes to all shareholders,
I am not an expert here. Correct me if I am wrong. I think your calculation of "$8.29 x .80 = $6.63" is incorrect. Yes, there are 20% more shares, but the amount of cash increases by $295M with this deal. This results in an increase of $295M/(339M total shares) = $0.87 in NAV per share.
Your math on the NAV is actually off by $295million. You can not just multiply the past NAV by .80. You then need to add the $295 million that they received for the dilution. This is still a reduction of NAV, but not nearly as much as you stated. Interesting point(and I am just estimating) is that we now have a mkt. cap of around $1.9 billion and we have about $1.2 billion in cash plus any cash generated in Q1.
Things actually look really good for additional positive improvement.
You miscalculated the dilution. The book value adjusted for the new shares (based on 12/31/09 net assets) would go from $8.29 to $7.74.
Add 295 million of new $ to the 12/31 book value of 2.329 billion and then divide by the new number of shares of 339 million (281 million plus 58 million new shares)
Only regret is I missed the .10 MAY22 $5 puts, still in there in case it surges to 6-ish again today, but that may be wishful thinking. There's still money to be made in this puppy in both directions, every single day. It's a cash machine.
Thats a fact. You only have to look at the price spread today to see its way unstable and very tradeable. You can make bank on these swings and you can really loose as well so you have to be careful. For the small position guy trading it can be profitable. Some of these guys got in early and have some big positions. No sense messing around in that case as it just does not have enough volume on the bid and ask to allow. Any one who bought pre market and sold the po saw a 70 swing. Ferdie was right...if you sold the pop you did allright. Thats really only for traders and does not apply to any longs. Most have such a good cost basis a 50% haircut still leaves them green.