Just curious? I also noticed that on my ETRADE account there is some new line on the sreadsheet. Is that in case I take the offer? Anyone seen that and what is it? Thanks.
I hear you on all of that.
But it doesn't mean I couldn't sell my stake today for 88 cents and then subscribe to buy for 70...
Consider if you had 100,000 shares (and the corresponding rights).
You could theoretically sell (large block considerations notwithstanding), raise $88,000.
You could then subscribe to 400 rights for $112,000.
And end up with an economic interest equivalent of 160,000 shares.
...Those 60,000 new shares just cost you 40 cents each.
I don't get it.
The market is up today which helps and DHT earnings for the first quarter may be good since they have six VLCCF. The VLCCF rates were decent for the first quarter due to Iran. In addition, the threat of bankruptcy has deminished due to this offer.
FWIW, I do not expect the pfds to be tied up beyond the summer and I am subscribing fully... The only reason I have not already is that I will have to take a bit of margin to do it so I am waiting until the last minute.
Otherwise. I completely agree with you that this move was probably more needed (than I care to admit) and that they tried to be reasonably fair to shareholders about it.
...On top of the direct liquidity ease you mentioned, I think the affiliation with Anchorage will also butress their financial position, as they discussed when they announced the transaction. I expect we will likely be hearing positive news in the near future related to this which should hopefully move the stock.
Good luck, sir.
Two ways to play the stock. If I fully subscribe, I'm locking in the preferred money for a year or so, which with what I already have, causes me to get close to the maximum exposure I want to this stock. If the stock languishes, my money is tied up for a long period of time. If I do less than a full subscription, then I keep my money available for DHT or other stocks that are actually moving up and buy them once they start moving.
One is essentially a buy and hold approach, the other is timing the market with stocks that already have some momentum to the upside. I'm undecided which way I want to go at this time. Some of my stocks have hit their stops, so I'm receiving cash for them, which may tip my decision to buy and hold. We'll see how it plays out this week.
My perspective for what it is worth, is that DHT management didn't have much choice but to raise equity (tough to get bank financing, LTV near or below triggers, and cash dwindling). A rights offering is the best way to do so for the current stockholders, so I believe management is trying to do the right thing by its shareholders. They could have simply let the fund buy all the shares they wanted without offering any to the current shareholders.