This convertible debacle should cost both the CEO and CFO their jobs. The board you would think should have some interest in preventing their shares from going to $0, although they each own far less than Herbert. Will be interesting to see if they make some changes in light of such glaringly obvious inept management.
Convert holders can convert when the price gets to 1.2x the conversion price of about 2.34 and under other conditions. I also think if the convert was trading at .83 then they could convert now although i need to look more closely.
In any event, the market has factored in the 40% dilution.
DVR is going nowhere with a $3-4 buyout (which really ends up being $4-5 to any buyer due to payments due convertible holders in case of a buyout) probably their best outcome at this point. That would be about 50% of the enterprise value GLBL received.
With a buyout convert holders get an amt of cash for each 1,000 principal converted equal to price of buyout x conversion rate which would be about 500, so essentially at a $4 price they get $4x500 or $2,000 per $1,000. They got worked so bad buy the bankers.
They clearly have poor mgmt. Their pathetic funding mgmt cant be good for business and some competitors (former glbl) have much deeper pockets now. They cant generate enough cash to meaningfully upgrade their fleet.
Maybe Cape Wind will actually happen, maybe they will recover their historical business in the GOM, maybe they will have lots of success in Australia and/or West Africa, maybe they will get a cpl hurricans to create a mess to clean up in the gulf. There are possibilities, but this clearly isnt the mgmt to capture them.