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Asia Entertainment & Resources Message Board

  • johnwelcome23 johnwelcome23 Feb 17, 2011 2:50 PM Flag

    here's what is up

    They need more cage capital (money) so they can run the new tables they have been offered. So they are going to do a 6M share private placement @ $10 to raise $60M. That is why it is stuck at $10.

    Only a guess.

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    • Totally wrong on your guess about needing more cpaital. Management has stated that they have sufficient capital based on the warrent exercise. The reason the stock is down is due to unlocking of restricted shares in early February. A few sellers likely need to pay taxes on their shres for services that are now tradeable. Looks like this selling might be over given large buyers coming back in.

      • 4 Replies to kabbalist6666
      • "Totally wrong on your guess about needing more cpaital. Management has stated that they have sufficient capital based on the warrent exercise."

        Here, in a nutshell, is why you are wrong. "That was then, this is now."

        The cage capital they had following the warrant exercise was adequate for the tables they had and helped them get more profit out of those tables (see the Dec. RCT announcement). But the offer from Galaxy, if accepted in full, adds 50% to the number of tables they'll operate. That will require more CC to make those tables highly profitable. Is it possible they can operate more tables with the current CC amount. Sure. However, IMO, they'll need more CC to handle that many more. I'd hate for them to pass up that opportunity for the lack of cash. So I say raise some.

      • "Totally wrong on your guess about needing more cpaital. Management has stated that they have sufficient capital based on the warrent exercise."

        That was then, this is now. I'm sure you noticed one of the things that management attributed to the higher Dec/Jan. RCT was the higher cage capital available. Now they have been offered the chance to operate 12 new tables, or about 50% more than they currently have. Can they operate the new tables with the cage capital they have now? Sure. But not without sacrificing profit as the higher the CC available the more money they can make.

        To that end I received a voice mail from IR after I contacted them regarding the invitation from the new Galaxy Hotel. I don't remember it word for word but I do remember the guy saying not to expect an immediate ramp to the extra 12 tables they were offered because, "it is a capital intensive business." I took that to mean they need CC to run the business in a way that maximizes profit. It may even be that the Galaxy will require AERL to have X amount of CC available before they sign off on the number of tables to be run.

        This is not to sound negative about the offer. It is great that they have been recognized as a company meriting the invitation. I'm just saying things are not as simple as they may appear, to you.

      • "Totally wrong on your guess about needing more cpaital. Management has stated that they have sufficient capital based on the warrent exercise."

        You don't get it.

      • The shares were unlocked last June.

    • here's another guess. its a pos going nowhere becuase its a pos.

      just a guess

      f'ng retard

 
AERL
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