For chuck, money, whisper, wanger, you guys seem to know
a lot about the recent deal. I have asked for help from you guys in explaining how the deal is bad for ARRY. I was thinking the deal was good, but you seem to think o therwise. I am now thinking about selling, since you are pretty convincing. Now I am getting more confused, seems the price is riising, Is this what is called a "dead cat bounce"? One or more of you please respond and help me to understand the deal. Just in a nut shell, tell ne the pro and cons of it. thanks
The company borrowed at 3% to pay off $90+MM of debt at 7.5% saving $3.5MM annually in interest. No dilution until stock reaches $7.15. It also picked up $35 + MM in working capital. How can any of that be bad?
Pros: Array has lots of money now for more trials. Funds who bought believe SP will at least be $7 in 2017. Maybe expect 50% gain from $5 by then. Not too bad for a 4 yr gain.
Con: Warrant exercise at $7 instead of higher. Investor confidence got deflated.
The stock is going up right now because it technically has to, it is overextended and will move up and trade sideways for a few days. Don't be fooled, the stock will continue its downtrend. Give it a few more weeks until the technical analysis shows a trend reversal, and then pick up some more shares.