goes much further, I would without question be inclined to take advantage of it to lighten up long positions.
Hk's situation is not favorable. I liked the terms of the convert relative to what it might have been, but it would be silly to ignore that the reason they had to do it is that their balance sheet is truly a mess. I also recall that their agreement with Hunt and the Canadian pension board entitles them to more shares if HK issues a preferred , so that further dilution has to be taken into account.
don't confuse a" punish the ill timed shorts of yesterday after hours and today's early going" Rally with a true rally based on fundamentals. This is not a good situation.
Hk is still in deep trouble.
Value, The Canadian pension fund can't be too happy buying for over $7. Over 600 mil. shares authorized is going to keep this down. Floyd will have to do a reverse split before he sells this company. Maybe sell for $20. after a 1 for 3, so much for a multi bagger.
Not quite 600 Million Shares. I will copy and paste a news article from December 2012 below:
CPP Investment Board closes $300 million Halcón Resources investment
December 12, 2012 By Ted Liu
CPP Investment Board closes $300 million Halcón Resources investment.
CPP Investment Board (CPPIB) has closed its previously announced $300 million investment in Halcón Resources Corporation (NYSE: HK).
CPP Investment Board, through CPP Investment Board PMI-2 Inc., purchased 41,899,441 newly issued shares at $7.16 per share for $300 million.
Vinson & Elkins, L.L.P. acted as legal counsel to CPPIB in connection with the investment.
The CPPIB investment is part of con-current $1.45 billion acquisition by Halcón Resources of two wholly owned subsidiaries of Petro-Hunt Holdings, LLC and Pillar Holdings, LLC , which own a total of approximately 81,000 net acres prospective for the Bakken and Three Forks formations primarily located in Williams, Mountrail, McKenzie and Dunn Counties, North Dakota.
“CPPIB’s investment aligns with our strategy to provide strategic, long-term capital to well-positioned companies like Halcón and work with management to help create value now and in the future,” said R. Scott Lawrence, CPPIB’s Vice-President, Head of Relationship Investments.
Following the closing of the investment, CPPIB owns approximately 16.1% of Halcón Resources outstanding common stock or 11.5% on a fully diluted basis.
In conjunction with the closing of the financing, Halcón and CPPIB entered into a Stockholders Agreement providing, among other things, that for as long as CPPIB beneficially owns at least 5% of Halcón’s outstanding common stock, Halcón will recommend to its stockholders the election of one designee of CPPIB to Halcón’s board of director.
As a result of the Stockholders Agreement, Kevin E. Godwin, Senior Portfolio Manager of CPPIB, has joined Halcón Resources board of directors.
Sentiment: Strong Buy
This rally is more like long term holders covering their short positions. Let's face it...they knew that this offering was in the works...so let's short it down and cover when the terms are known. This stock will be back to 6 by next week. And so it goes.