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Pacific Capital Bancorp Message Board

  • josetatb4 josetatb4 Apr 29, 2010 2:55 PM Flag

    What are we missing on stock price?


    Serious question........Ford agrees to buy 91% of PCBC for $500 million? As of yesterday's close there were 47 million shares outstanding @$4/share....Ford could've conceivable bought 100% of PCBC for 188 million by buying all the existing shares from existing shareholders - so why wouldn't he? Only reason appears to be the existing shares were not worth 188 million, right? If he bought all the existing shares for 188 mill approx, the money would have gone to existing shareholders and not the bank, he would have owned 100% of whatever PCBC was worth, which appears to be very little.

    Instead, he's putting $500 mil fresh capital into the bank itself for 91% stake (Treasury owns the other 7% and current shareholders 2%), so the shares he's getting from the bank itself actually represent a real stake in the bank (i.e, the capital he put into the bank). So 500 Mil for 91% stake values the post-infusion bank at $549.50 million.........91% of that to Ford ($500 million stake- i.e. the fresh capital he put it); 7% to Treasury ($38.5 million approx); and 2% to existing shareholders ($11.50 mil approx).

    $11.50 million stake to existing shareholders divided by 47 million existing shares = $0.24 / share approximate value. Math is rough but appears this is where the 20 cent/share purchase price comes from? So why would this stock still be at $2+/share? Does basic math not apply to stocks or am I just missing something entirely?

    This is serious question as I'm no stock analyst........just an individual investor reading the press releases and listening to the conference call this morning and totally confused why this stock is not down to 20 cent range yet.

    My long term prediction on this stock is "confused"!

    This topic is deleted.
6.17-0.5300(-7.91%)May 2 3:55 PMEDT