The answer given to this question by management seemed to me to imply that raising additional equity would not be necessary to fund additional "deals" this quarter and that there would not be another equity raise through selling common stock. Management did however indicate previous to the question that the sale of preferred equity was a possibility. How did others understand the answer given to this question?
Just the opposite. They were asked to confirm there would NOT be an equity raise before the spin and they did not do so. They said equity raising depended on closings schedule. Earlier they said they expected to close hotel deal in 2Q. Only 140 million of unrestricted cash at 5/7.
Yeah, they recited several means of raising cash, including preferred, common, debt and credit lines, but I think common issues before closing hotel deal.
I agree with Dar on this one. The silence after the question was asked in my mind spoke volumes as did the way they danced around the question saying that they had various financing options at their disposal preferred, LOC, debt, etc. I expect a common issuance to fund new growth deals closer to closings to minimize dilution.
My take was that every form of capital raise was a possibility, they went thru and named all the types, and I think they specifically did not want to comment on exactly what they would do. I would say an equity raise is still possible.
My interpretation of managements comments was that there was no immediate need for additional capital with $200+ cash and new money flowing in from the business. If one or more of the already announced deals closes over the next 1-2 months, they have several options to fund, and an equity raise via common or preferred could be an option, but only if it is the best option at the time.