What do you guys think the odds are before lockup expiration of MCP doing a secondary offering like QLIK did to allow for private equity firms and other insiders to sell their shares in a nonpublic offering for a predetermined price? That is the only thing that can keep this from dropping at lockup, but it looks like their one big porivate equty firm ahs over 27 million shares, and this is one way for them to get out with a good price?
This has to be the most ridiculous idea I have ever heard. Essentially, you are proposing a new share offering, to finance a share buyback. That is COMPLETELY pointless.
MCP will need more money, as they are considering an expansion, and do not have adequate cash. They can either finance by new share offering, borrowing, or pre-arranged sales (hedging). Hedging won't get them that much cash, but if they agree to forward sell at a low enough price, then they can raise money now. (But of course that decreases the eventual meager earnings even more).
As for will they do a share offering, to raise money to buy shares from the IPO lockup: NO. Emphatically NO. That truly is a Ponzi scheme idea.
They can lock in there profits now by shorting the stuffing out of it now. They have as many shares as they need to cover with. Drive it down now then cover upon lock up. That guarantees them this price before the lock up.
The S1 explicitly forbids the lockup share holders from pre-aranging any market moves. It calls it out in several places. Too many are assuming the financing was from criminals intent on fraud.
The S1 language:
we and they will not, during the
period ending 180 days after the date of this prospectus (the “restricted period”):
• offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract
to sell, grant any option, right or warrant to purchase, lend or otherwise transfer or dispose of,directly or
indirectly, any shares of common stock or any securities convertible into or exercisable or exchangeable
for shares of common stock;
• file any registration statement with the SEC relating to the offering of any shares of common stock or any
securities convertible into or exercisable or exchangeable for common stock; or
• enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic
consequences of ownership of the common stock
whether any such transaction described above is to be settled by delivery of common stock or such other securities, in cash or otherwise.
In addition, we and each such person agrees that, without the prior written consent of Morgan Stanley & Co. Incorporated and
J.P. Morgan Securities Inc. on behalf of the underwriters, we or such person will not, during the period ending 180 days after the date of
this prospectus, make any demand for, or exercise any right with respect to, the registration of any shares of common stock or any
security convertible into or exercisable or exchangeable for common stock.
The smarts know that this equity will fall precipitously prior to lock-up so they will not consider that maneuver. These guys are holding huge amount of shares and they count each and everyday prior to getting to cash this pig out at expiry!
A secondary offering would, by necessity, have to be down around $30.00 because of the book value is this equity. Therefore, it would crater the stock the very next morning because of dilution and so-called investors realizing that the insiders had negotiated such a ponzi scheme upon the other equity holders...
See you below $40.00 shortly!!!