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Enzon Pharmaceuticals Inc. Message Board

  • one1badbilly one1badbilly Apr 27, 2013 12:50 PM Flag

    Outstanding Shares vs Float Shares Mystery

    Perhaps someone can help out with the explanation of accounting for the some 16m share difference between the Outstanding shares and Float Shares. As I read the latest 10K there are 2.3m options outstanding, and 0.9m restricted shares, or roughly 3m shares, leaving 13m shares unaccounted for. As near as I can tell these shares (13m) are sitting in the company treasury. (Possibly as a hedge against further dilution were the payment on the 4% note due June 1st to be demanded in stock, which would require 17.1m shares to cover @ $6.76. Such a demand is hard to imagine, but who knows what those in the know/control have up their sleeves.)

    In any event the 16m difference accounted for $32m of the $87m $2 dividend payout, and is about to account for $26 of the $1.60 dividend payout! Or $58m, given that roughly $11m of that is or will go to reducing the bases of the options and RSUs, that leaves $47m remain a mystery. Any thoughts?

    The only thing I can come up with is that these moneys are going towards reducing the share price bases of the options, RSUs and stock held aside in the event of the 4% note being paid off in part or in whole in shares.

    But if this is true, regarding the 4% note, then whatever is paid off in shares should leave a corresponding net balance of cash in the companies coffers. I.e., 13m shares times $6.76 or $88m dollars addtional cash on hand for the company (i.e., not paid to the note holders as part of the would otherwise have been the $116 cash payment).

    This would also put the note holder accepting a current pps of $3.76 and in line for all the other goodies to come. Who are these note holders anyway?

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    • Franklin Advisors were one of the original 2013 note holders.

      "BRIDGEWATER, N.J., May 16, 2006 (BUSINESS WIRE) -- Enzon Pharmaceuticals, Inc., (NASDAQ: ENZN) announced today that it has commenced a private placement of up to $175 million aggregate principal amount of convertible senior notes due 2013. Enzon expects to grant the initial purchasers an option to purchase up to an additional $50 million aggregate principal amount of such notes. Enzon intends to use the proceeds from the offering to acquire from time to time its outstanding 4 1/2% convertible subordinated notes due 2008 which acquisitions it may effect through various methods, including tender offers, open market purchases, privately negotiated transactions or other transactions. Enzon currently has $394 million aggregate principal amount of 4 1/2% convertible subordinated notes due 2008 outstanding.

      In connection with the offering, Franklin Advisors, Inc. has agreed that it will purchase a minimum of $75 million principal amount of such notes provided that the interest rate and initial conversion rate are within specified ranges. In addition, subject to completion of the offering, Franklin Advisors has agreed to sell $128 million principal amount of its 2008 convertible notes to Enzon.

      The notes being offered in the private placement are being offered only to qualified institutional buyers, as defined in Rule 144A under the Securities Act of 1933, as amended (the "Securities Act"). The notes have not been registered under the Securities Act or any other state securities laws, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and applicable state securities law."

      I'd post the link however yahoo finance still has their h***ds up someones #$%$.

    • Where are you getting the float count? I see different numbers in different places...for ex, the WSJ lists it at 41 million.

      • 2 Replies to stockprophet206
      • It's listed on Yahoo's ENZON statistics page. Yahoo gets their data from Thomson Reuters. Almost everyone get's it from Thomson. I spent some considerable time and effort a couple of years ago trying to pin down the FTDs for DNDN, in the process I was able to directly contact the Thomson people through the people at CNBC, they opened the door for me sort to speak since they had an account (I convinced CNBC that they had inconsistencies in their posted data). I spoke to the Thomson directly several times by phone, technical people sitting at computers, going over the data I had from postings of different finacial news providers' websites. Some of providers were in error, though Thomson clients, however Thomson was adament that their source numbers were current and accurate. Are Yahoo's current? Not sure, but they use the best source, so far as I know. And Yahoo's numbers have been what they are, or nearly the same, since the begining of the year when I started following ENZON.

        Like the ex-dividend date this is a dicy issue and some certainty on both is crucial for sane trading (not to forget the other poorly assembled or explained assets).

        The WSJ 41m would squares (almost) with the 3.2m non-float options and RSUs, but if the Yahoo data is right, and there are 13m shares set aside for a possible in part or whole stock paydown on the $116, then this is a huge huge factor.

        Further, take just the 3.2m shares for options and RSUs, where's that cash sitting? $6.4m from the $2 dividend, and now possibly more than $11m total after the $1.6 dividend. I don't see the $6.4m anywhere in the finacials, the whole $87m has come out of the cash flow for the 44m outstanding shares, but where's the $6.4m in cash, it's not on the ENZON or KPMG balance sheets. So if you can keep that cash out of sight why can't you keep $32m and eventually $58m out of sight?

      • investorsdotcom lists it at 32.8m, yahoo and others at 27m

    • The note holders are funds. You can go see the list in the original 424B documents on the SEC website from 2007.

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