They are likely negotiating price now. Unfortunately the market makers are the ones doing the negotiating, so of course they know where to trade the stock way before we ever could. And yes, to mitigate their risk, they do put on a short position before buying the new shares (to then resell to clients via their trading desks). Bad news for a thin stock like FLY. Could be a buying opportunity but I would WAIT until *we* get to know the price because who knows what kind of gyrations we could have in store until the transaction is set to go off.
Amen. Management gets a "D" for execution. They have always sold a story that the shares were trading at a large discount to BV (fair value). But if your shares are trading at a discount to value, you don't offer additional shares and dilute existing shareholders. You figure out how to shrink the valuation gap.
They have basically just conceded: 'our book values are inflated; we're willing to do a transaction at .7x or .8x BV (or whatever) which reflects the actual market value of our business.' Very disappointing.
As I said before, suspect management has benefited from the maxim: 'better to be lucky than smart.'