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Iridium Communications Inc. Message Board

  • dave2207z dave2207z May 5, 2014 9:16 AM Flag

    New Offering Opinion-Carne8ielaker

    Carane8ielakear--I'm interested in your opinion of the new offering,

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    • the bad news is that the deal was at the higher end of the shelf amount....but the good news is that now it will be DONE! There will be no more "anvil hanging over their head"...as to the deal with Baron, I think it is masterful! If you know anything about Ron Baron's philosophy, you know that he is value first, and NOT hot money. So right off the bat you know that $50 million of the deal is going to be in solid hands...in other words, he aint flipping it. Second, the lions share of the remainder of the deal is going to be converts. WHile there are a lot of convert arb funds out there that (that will short the stock while going long the convert) a convert is a perfect piece of paper for a long term investor who wants the chance at the 5 bagger, but wants some protection, both on the downside as well as from volatility. I have not heard any price talk on the deal, lets say that the conversion price is closer to $9 than $8....and depending upon what the coupon is, they may be able to bump the conversion price up close to $10....so the company is effectively selling the majority of this shelf at a price way above its 52 week range. I think you are seeing it in today's price action....if you are short, you have to be very afraid...afraid that the quantity of common for a "cover on the deal" is now less than you planned. And if Baron is out there ponying up $50 million in long term money (knowing that the deal will be behind him) then I am sure there are others thinking the same way....buy on the deal or before, but don't wait unitl the aftermarket!

    • Dilution is always not good, especially at much lower price of $6.50. We should go down to sub 7 today on the way to ~6.50. I say Sell to protect your profit.

 
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