Here is my question. The earnings call is a little over a week away, so why make this announcement? If it was about keeping us informed, then why not say something a month ago? Something is up and they wanted the price higher BEFORE the earnings call.
That is a good question.
However, based on the SEC filings, it appears to me that he owns fewer than 1 million shares. As CEO, he would have to file a new form every time he acquired or disposed of stock - whether (i) for cash, (ii) by company grant, (iii) by company grant of stock options, (iv) through a charity/trust, (v) by reinvestment of dividends, (vi) by exercise of previously granted stock options, etc.
Of course, there could be something that I have missed.
>>Would the CEO have bought over 1M shares since December unless he thought he would make money?<<
The latest Form 4 on the SEC's website shows Jonthan's total beneficial ownership at 394,659 and his foundation at 300,000, with his only purchase this year actually being 100,000 shares by the foundation.
Is there something that I'm missing?
It does seem a little odd, "why now?" is a very good guestion.
My frist thought was they are trying to reasure everyone about how the money was spent from the last offering. Then there is the momentum of the stock going up with the market and in a few days drip shares will be bought. I had forgot about the possible second part or half of the offering.
I too am wondering, the last time we made it to over $7.50 and then soon after the offering was announced. I wonder if they will wait until we see $7.00 again before the next part of the offering hits.
I was hoping to be back to $9.50 before that happened again.
It may be they simply wanted to give the information before the earnings release, so the questions about "what did you do with the money" wouldn't be the only topic going forward. Also, it presumably allows them to tell the analysts the same information, now that it is public without violating SEC rules on divulging "inside information"?
How about those numbers? They did not only par our expectations, but shattered it. Again all the questions I have has been answered today.
On the other hand they will raise money again... oh no, they went shopping spree with all their cash.
I will speculate as well that they will need to raise another 40 Million on their next offering based on previous cancelled offering.
CEO just gave us a clue that there are so much opportunity out there to make money, just don't have much capital to buy them.
Again, he cherry pick the one with best ROI.
Are negative interpretations the only ones available? Perhaps, they got tired of the stock price just drifting, not taking advantage of the market advance. Knowing that the market was doubting their ability to pay the .25 dividend for the remainder of the year in light of the new share issuance, they provided detail on how they were going to be able to do that, and then asserted again that the dividend was safe for 2010. In light of their performance throughout this credit crisis, I think they deserve some benefit of the doubt.
We moved based upon our own news today.
I wonder how long lasting that effect will be?
The timing of this is interesting.
They waited to release the news until the market turned up. If today had been a down day I wonder if they would have held onto the news for a better up day?
A. We know they only did half the offering, they want more
B. They don't typically make announcements like this the week before a the call.
C. The emphasis in the announcement is all about the returns from the last offering and how they made up for dilution.
It all adds up. I don't see this as a head fake before announcing a bad quarter. I see it as a fair warning...we're going to do it again, rather than dropping it on us like a bomb out of the blue.
the problem with thinking they are going to announce a follow-on offering at earnings is that they need the price to go up significantly before announcing a follow-on offering.
They cannot discount the price to less than $5 because of all of the investors who are conditioned on $5.
It makes far more sense that they want as much money as possible from the sale of stock for the DRIP, which should be a hefty sum given all of the added shares.