If any of you are confused about the new shareholder rights plan...
...there was an excellent tutorial a few years ago in CFO Magazine when Ford did this. (Keep in mind that BWEN has almost $140 million in NOLs.) The morons at Yahoo won't let me post a link, but Google the following words and it will be the first link that comes up:
Thanks for the info on the article! After reading news, I understand the why which I think is a good idea. What I'm trying to understand is the dividend of preferred share rights. Does this mean that if this poison pill is triggered, I get one preferred share for every share that I own? The word "rights" I think causes my confusion. Your insight would be welcomed. Thanks again!
Until the 8-K is filed we won't know the exact way that this works. Regardless, it would essentially be the equivalent of a stock split for anyone but the guy who goes over 4.9%, who would thus be diluted back down. Once the plan is in place it's unlikely to ever be used anyway.
"Does BWEN's move imply someone is sniffing around trying to buy control in BWEN?"
I don't think that's the issue here. If a passive investor buys just 5% of the company (roughly only a $2 million investment right now) and then takes that position up by another 50% (i.e., approximately only another $1 million at current prices) the future use of the NOLs will get severely restricted. If an acquirer wanted to buy the whole company they'd lose the NOLs anyway and this wouldn't be an issue; in that case, I'm sure that if the buyout price were attractive the Board would simply rescind this new clause.