rrb, how many of the preferred shares are left to sell after the holders voted to go from 212,000 shares up to 4 million? I figure there are still more than 2 million overhanging this issue. Once these are gone there should be a little premium to this thing. If they stop selling the company shares that would make the shares that are bought a little more in demand and will take the 25 dollar lid off the stock. I wanted to buy a bunch for my fixed income portfolio since management has practically told us these will not be redeemed on time. Just wondering how much time I have before I need to take a sizable position Thanks, IB
Well, I don't have a crystal ball, but they gave an update in one or several of the conference calls. I forget how many they have issued but it is close to what you say, maybe 2 million. They are sold daily into the market, so depending on how strong the demand is, it could speed up or slow down.
The one thing I will caution you about is that NGAS has 30 private partnerships, these are partnerships where NGAS collects money from investors and drills wells on their behalf and collects a management fee as well as a working interest in the well (likely a carried interest after full payout). Point is that on the oonference call, Magnum Hunter management made it clear they want no part of managing money for private investors. They are going to turn the broker securities business over to new management (it has no assets, so they said they may not even collect any proceeds from the divestment). The actual partnerships are monthly payout vehicles and most of the investors want yield, so Gary was talking with Bill (the bozo CEO from NGAS) about possibly swapping MHR Preferreds for the partnership assets (acreage, production). That would allow MHR to fold that production back into the mix, the partnerships would be dissolved and no more hassle, the partnership investors would get a nice income security and everyone lives happily ever after. If that happens, those preferreds might go faster than we think.