SFL and FRO are joined at the hip. Although SFL has made progress in diversifying from the oil transport business it is still too involved with FRO for my comfort. FRO was the reason I sold my SFL years ago and is what keeps me from going back. But what happened to FRO stock yesterday confuses me. Why would a company in a bad business (and with China importing slightly less oil-getting worse) which lost money last year and is on track for losing even more this year, suddenly have its stock shoot up 27% in one day on 6 times volume. A fat finger? a computer glitch? someone trading on insider information? (forget that - it would be illegal and that never happens.) Thoughts?
It's starting to make sense now, this convert was known outside the public domain yesterday...IMO. The surge in FRO sp would have to mean a possible institutional short covering and a swap of shares, my speculation. Stock don't just surge 28%+ on 6X average volume in an hour for no reason, especially a stock that is swimming in wall street's negative sentiment pool!
I think the two are connected and if there is a market for the shelf/8M shares, my assumption is this is good news LT for SFL and FRO has agreed to something that benefits top management and saves the company, etc.
My assumption on this statement...
"The Company intends to use the net proceeds of this offering to invest in new assets within the shipping and offshore sectors and for general corporate purposes, including working capital."
Normally a company will use the standard boilerplate statement on coverts/offerings, "for corporate use and opportunities down the road that increase shareholder value, etc".
It sounds specific to me.. "invest in new assets within shipping and offshore sector's", notice they didn't refer to purchase or buy assets, they used the work "invest".
Doesn't change my opinion on SFL, but I'll assume there will be some news hit the wire this week related to convert/FRO. The China news was negative and had a huge reverse up swing on a stock that is most effected by China news.
Hey Vin, just got back in this morning after being out for a couple of years. Price and yield were just too tempting. Anxious to see what follows with NATDF. At the last CC they discussed some interesting deals or partnerships in the works.