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Empire Resorts Inc. Message Board

  • cliffbanger86 cliffbanger86 Jun 8, 2009 4:51 PM Flag

    Dilution to pay off bonds equals $3 stock price

    I just love this company. They are in a business that is very likely to receive additional gaming soon; they have a $6.5MM line of credit that can be easily taken out by new partners if necessary; and if they have to issue 30MM shares to pay off the bondholders then they will be a debt free company with less than 70MM shares o/s.

    What is Empire worth with no debt and 70MM shares o/s? I say at least $200MM and that means a $3 share price if fully diluted.

    Of course, not all the debt will be converted into equity (and hopefully as much as possible remains debt). But this is a worst case scenario if dilution occurs.

    There are a bunch of looney birds here, but that just helps those who understand financing to make money.

    Empire will be over $2 this week (maybe tomorrow) and then close to $3 once the deals are in place later this month.

    Enjoy!!

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