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Five Star Quality Care Inc. Message Board

  • litespeedvb1 litespeedvb1 Oct 16, 2006 9:24 AM Flag

    my question is this--

     

    if the picture is so rosey then WHO is doing all the selling-surely must be funds with volume like this and why are they exiting??

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    • Whenever the notes convert to stock (which is way down the road) the new shares issued will futher dilute the stock.

      In the meantime how will the interest on the notes be paid? From earnings?

      And the last unanswered question is: What is management going to do with the 110 million raised from the notes.

      The good thing is: there were investors waiting in line to buy up the notes!

      The sell-off was probablity caused by uncertainty.

      In the long term Five Star is a great stock.

      sandollor (:-:)

      • 2 Replies to sandollor2000
      • <Whenever the notes convert to stock (which is way down the road) the new shares issued will futher dilute the stock.>

        I think they will be included right away when calculating fully diluted EPS, if the EPS is positive. Hope I'm wrong.

        On the bright side FVE is holding up quit well on a down day. Maybe the bottom is in.

      • I have figured out that the executives at this company find every way possible to put cash into the sister company Sunrise Living. They have done it this year, last year, and now the bonds to get 110 million into Sunrise Living next year. The interest will be paid out of profits. The stock was over 11.25, they could have waited until reporting the past quarter in the first week of November before doing this bond issue, but they like to drive the stock price down. That pissed me off. I admit i paid 10.97 for this stock. I hope it goes over 11.50 after reporting so i can get rid of it. Its quite obvious this company is around to be raped for the benefit of Sunrise Living. I feel they keep this up no institutions is going to want to have anything to do with the common stock.

    • Good question ... Rev Shark (a very successful trader and smart guy) thinks that it was arbitrage related to the bond offering. He thinks the trend will reverse as soon as the next bit of news comes out. The casual observer/investor has surely been selling, but you have to ask yourself, why sell, if it will be back to 11 within days or a week or two. Then we are back to the eps report ... will it be ok? I am thinking yes, for the reasons I stated earlier.

 
FVE
3.48-0.2200(-5.95%)Jan 30 4:05 PMEST

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