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SWS Group, Inc. Message Board

  • stokker3 stokker3 Dec 6, 2010 8:14 PM Flag

    Dilution

    Today's announcement of the issuance of $95 million (an possibly $109 million if Merrill exercises it's option) could dilute the stock anywhere from 66-76%!!! The Fed's are clearly on their backs and that's why at least $75 million (an frankly, probably all of it) is going to bolster the bank's balance sheet. Without it, the bank is history.....and still might be if the loan losses continue, since this is their last shot at raising any capital. This stock is going much lower.............

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    • I have not seen the actual conversion rates etc. But, my take on this is that this company is completely out of choices. They absolutely could NOT offer more common, especially at these low prices. The last time they offered common, I believe it was two years ago or less at I think $12/share....those "new" investors have taken it in the back of the pants! By doing a senior note, they are basically telling the buyer that they too can own a Texas thrift for about $100 million, because they are suffering from loan losses that are likley to result in the bank being shut down by the FDIC. The convertible aspect of the deal is highly dilutive, but that dilution amount depends on the actual details of the deal, i.e., the conversion rate, etc.
      Shareholders are looking at the very real possibility of being left with a clearing company that is barely breaking even and a small brokerage business that would be virtually worthless if it weren't for the acquisition of ML Stern & Co on the west coast. But, even that company has been ripped apart as SWS fired most of their very best talent. What a shame. Karma

    • Will not Dilution the Common right now, correct? Better than common stock offering..

      $95 Million Convertible Senior Notes Offering.

 
SWS
7.06-0.05(-0.70%)Sep 19 4:03 PMEDT

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