I see today that my shares of Vista Gold (VGZ) are down 10% on a volume of 1 million shares traded. The appparent reason being that VGZ has approved a public offering at $8.50 per share to issue 3-3.75 million new shares (10% share dilution) to finance their spin-off. This is a slap in the face as far ras I am concerned to all current share holders! Why not do it at $9.50 which was yesterday's close? Apparently, others on the inside had wind of this as the last two days the shares of VGZ were going down in anticipation of this event! I can't prove it but just look at the last few days trading. Vista Gold was recovering nicely from its 30% loss since this May like all mining stocks. Is it possible that inside VGZ share holders (brokers) went short the last two days? You bet it is. I can't prove anything but this stinks to me. Any time a company does an offering at below the current share price it is a slap in the face to shareholders. I have a call in to VGZ's shareholder relations and haven't recieved a return call yet!
10% fall in more issuance of common stock is expected, it was appropriate for them to figure market value at 8.50, because the perceived value would pull it down into the 8.50 range anyways. its the company's offered correction before the investors correct it themselves.
Why didn't you get out at 12? This offering was planned and announced over the summer. You suggested a higher offering price but then no one will buy it and the company would have a tough time raising the money they need. Heck, the company will have a tough time raising the money at $8.50 per share. Apparently, the offering was suppose to be for private rich investors but with the stock price below 10, there is too much risk and no reward for the private investors. I'm afraid the company will have trouble raising the money they need at $8.50 per share. There is simply no demand.
That's what I was bitching about earlier. Sure, everyone knew the financing was imminent, but why kick your existing share holders in the groin? Where is the management on the side of the common stock holder? Their real long term plan is to shake all of us real owners off ,so they can engorge themselves on our shares and sell to the likes of Barrick -- again probably at a discount to market. I remember back when I owned a bunch of Homestake Mining calls and those bastards sold themselves to Barrick, at a disount to their current share price, right before the gold boom took off. Anyone else remember that shafting?