imarugerfan....I'm pasting the part where the Tender explains the order. You are right, but look at the key words of the Tender, i.e., the fine print!! You are right about the pro rata; yet look at theis key part of the fine print: "until S&W has purchased 7,500,000 Shares" key word being "UNTIL"....big boyz will #$%$ these up first.
Upon the terms and subject to the conditions of the Offer, if greater than 7,500,000 Shares have been properly tendered and not properly withdrawn prior to the Expiration Time, S&W will purchase properly tendered Shares in the following order of priority: (i) first, from all other stockholders who properly tender Shares, on a pro rata basis, with appropriate adjustments to avoid the purchase of fractional Shares (except for stockholders who tendered Shares conditionally and for which the condition was not satisfied), until S&W has purchased 7,500,000 Shares; and (ii) second, only if necessary to permit us to purchase 7,500,000 Shares, from stockholders that have tendered their Shares conditionally (for which the condition was not initially satisfied) by random lot, to the extent feasible. To be eligible for purchase by random lot, stockholders whose Shares are conditionally tendered must have tendered all of their Shares prior to the Expiration Time. See Sections 1, 3, 4, and 6 of the Offer to Purchase.
i don't trust managements of public companies either, but I think you are letting your suspicions influence your interpretation of the words.
As I read the terms:
1) no shares will be purchased until expiration of the tender
2) first, they take the shares pro rata from all shares which are tendered unconditionally
3) if less than 7.5 million shares are tendered unconditionally, then they take the remainder from conditionally tendered shares.
How can you tell there were that many from institutions? Couldn't the large volume just be big traders trading on a penny or two in the stock ?
It does make sense to me that institutions would sell all they can at the current price. If my expectations are correct, the stock is up here on emotion which will evaporate when the tender is completed.
Just an estimated guess on previous volume and the tight trading range.
Institutions have the best of both World's. If the have 800,000 shares they can sell at $10. Even if they can only tender 100,000 shares, that's still a tidy profit. They can then go right back in and buy their existing shares back at the lower price or walk away. This Tender does nothing much for anyone who has less than 100,000 shares and I doubt they will have a chance to Tender anyways as the Insty's will have filled the Offer.
Will wait and see the details of the sales at $10, but yes, I agree; The stock will trend lower or be held even by buyback money.
If it goes back to test 200dma and rally, then it may be a confident buy.