Again, am I reading this correctly?
Because if I am, it looks like this could lead to shareholder class action lawsuit without even trying.....
Who in there right mind would advise the board to virtually invite and okay a shareholder lawsuit?!?
That is Bernie Madoff level hubris........
8.8 million tMeds plus an option for another 1.2 million tMeds for the underwriters.
Each tMed will eventually create five additional common shares. Altogether a maximum of 50 million new common shares may be created. With 172 million shares already existing this is close to a 30% equity dilution.
'Each purchase contract will automatically settle on May 15, 2015 for between 4.5855 and 5.3879 shares of Thompson Creek common stock, subject to adjustment as described in the prospectus supplement relating to the tMEDS offering.'
25/5.3879=4.64 which is exactly what the close was today. Funny how the market prices things before the news comes out.
Conversion range based on closing prices 5/4 and 5/7. Their underwriters, jpm, db etc. are not in the charity business. You can be assured they did everything to drive the share price down to improve equity stake in the offering. Not the end of the world - about 40 million new shares added to about 170 million outstanding shares.
The move down in share price was not in response to earnings - it had been going on for quite some time in response to this offering.
Management was forced into this position because moly market is still in the pits. However, this is no excuse for not raising the funds much earlier to reduce dilution.
Sure but you need to factor in the money it is bringing in. If they didn't dilute shares, then they would have had to borrow money via other means and/or sell off more of their gold, which would have also dropped prices equally or more.
Tmed vs common
Will the Tmeds be traded like preferred shares on an open market??
Seems like a 25% dilution to existing share holders..
But the bottomline profits should grow more than the 25% and fast..by bringing on the gold and copper revenues...They should clarify time line for this..
Management could have done this better by longterm financing of the total bill OR just plain sold the mine.
My guess the TMeds go to 16.00 over a year to yield 10%
I will short them if these trade
and common ??? Don't know Stays in 4's
I am getting out
Why didn't they go to existing shareholders first
If they were quality management, they would have anticipated the correct cost for the mine and planned accordingly. If they would have raised the money when the share price was higher or their circumstances were better, they would have gotten a more favorable deal than this loan shark deal they have done. Of course they don't care because it is the shareholders they are screwing not themselves.
The management of this company plain sucks. I only own 2000 shares at average 7.35 purchased this year but I am disgusted at the percentage loss that has occurred because of these idiots that call themselves management.