news release says:
Pacific Coast Oil Trust priced a a public offering by Pacific Coast Energy Company and other selling unitholders of 13.5 mln trust units at a price of $17.10/unit
If PCEC is the seller (and the parent company), why is the Trust (ROYT) doing the pricing?
These are not shares the Trust owns, the Trust is not issuing these shares as new, it it not getting any of the revenue from the sale (all goes to PCEC, the seller) - - - so why is ROYT doing the pricing?
ps// and why don't they issue a press release to explain this situation and correct the down-draft?
PSEC is selling their holdings of ROYT. It is ROYT units that are being sold but these are existing units so there is no dilution.
When a big chunk of units is sold it has to be at a discount in order to be able to move that quantity of units.
And the market price will typically decline to that discount due to the psychology of "if the parent thinks it is worth selling at $17 then why would I pay more than that".
But it's a temporary impact - no cause for concern. It won't affect your distributions.