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Diamond Foods, Inc. Message Board

  • palosparkflash palosparkflash Sep 30, 2013 5:08 PM Flag

    Dilution in Q1 due to Oak Tree Settlement

    Listening to the CC, there will be dilution of 5-6 million shares due to the Oak Tree settlement. (I missed the exact # of shares, but it sounded like either 5 or 6M)

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    • you got it wrong - the Oaktree debt remains to be adressed by the company (I guess some investors were hoping for an announcement as of today). In fact the upcoming 20% dilution (4.45 million new shares by the way) is related to the costly settlement of shareholder litigation.

      actually the company call wasn't a great success - especially the Suntrust analyst obviously was completely puzzled by the company's announcement to have again LOWER walnut supply compared to the already disastrous last year's season. Add huge marketing costs for the re-launch of the Emerald Snack Brand and Q1 will come in far short of current revenue and earnings expectations. Management promised better times ahead starting from Q2 on but clearly analysts seemed quite disappointed with management's statements and the lack of additional information provided.

      given the great move in the shares and the dismal short term outlook I would expect sizeable pressure on the stock price tomorrow which might be fueled by cautious analyst commentary.

      shorted the stock in after hours - looking to cover around $21 tomorrow morning

      long-term investors might want to think about initiating positions if the stock indeed gets walked down aggressively tomorrow.

41.30+0.07(+0.17%)Nov 25 4:00 PMEST