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Cobalt International Energy, Inc. Message Board

  • roosterly9 roosterly9 Jan 16, 2013 8:38 AM Flag

    Secondary offering

    Ok here it is don,t argue with me I know what I am taliking about.
    1- A secondary offering is an offering which is done ater the innitial public offering when company goes piblic. A secondary offering could be by company or existing share holders.
    2- When secondary offering is by existing shareholders, it is basicly one or more very large shareholders selling through bankers to the wider public.
    3- The reason company gets involved with secondary offering by existing shareholders is that they want an orderly sale of their shares by large holders, so that their shares don't tank when large amount of shares are dumped to open market.
    4- Secondary offering when they are done overnight like this one are always discouted from closing price to attract buyers.
    5- Sometimes such offerings are followed by stock price rise as the overhang ( large pottential sellers ) are removed. Example would be, if Facebook large holders were to sell all their shares, facebook stock would rally afterward.
    5- The selling shareholders here are in the business of investing on startups and need their capital to invest on another startup, even tough I do not like when anyone sells stock, selling here is not as bad as a long term holder would sell. After this sell tghe group here would have 175 million shares left. We don't know what they would do with thier shares latter on, they may or may not sell their shares in near future, only they know.

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    • Good information. Not sure the offering warrants the big price decline we're seeing today. As you said, four large sharehareholders are selling a small percentage of their holding, the three largest holders essentially going from 15% to 12% ownership in CIE with the shares being acquired by Morgan Stanley and Citibank Global. Based on its exploration projects CIE could have more than $20 per share upside in 2013.Just a case of the large shareholders taking some profits off the table. Hopefully, the price will rebound soon when this is understood.

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