What TX and other criminal bashers WON’T tell you:
They keep talking about how they expect massive dilution in order to scare you into selling and to justify criminal wash trading of the stock downwards.
What they WON’T tell you is that the value of your shares doesn’t change after dilution UNLESS the debt for equity swap is done at a price below the market price at the time of the announcement. In fact, after the dilution, the value of your shares can go UP if the price is ABOVE the market price. In fact, it doesn't matter if there's 100 trillion of new shares issued....your stock's value can still go up.
Here’s why. YRCW has a certain value as a company. If you were to give shares away to others for free, then there’d be more holders of the company’s value, everyone has a smaller share.
But if you give away shares and then GET BACK something in return (lowering the company’s debt, which raises the shareholder’s equity by an equivalent amount), then it results in more shareholders owning a larger pie (shareholders have a smaller share of the pie, but the pie is now larger).
The MAIN thing that determines whether the value of the company’s shares goes up or down is whether the share issuance is priced ABOVE or BELOW the market price at the time of the announcement.
If the stock is $5 and they issue, say, 70M more shares at $4 and raise $280M(and the new shareholders now own about 60% of the company), then it lowers the value of the company…however, the value that the company decreases is, even in that case, only (5-4)/5 = 25% * 60% = 15%.
Criminals won’t tell you this because they want to you to panic so you will sell your shares to them!
In fact, yahoo deleted my prior post that mentioned this!
Look at the Nov 2 press release. They announced that the debt for equity swap would result in the new owners owning 95% of the OS. But the stock price did not fall 95%. Why? Because they got something in return for the shares (higher equity). The shares only fell 68% or so, but I would argue that the price was artifically high prior to the issuance….in fact, the share price after the announcement was about $1.00, the same price as it was about 2-3 months earlier!
The share price fell from about $100 to about $32 on the announcement.
The price is now $3.31. Do you think that YRCW, given that they are likely profitable right now (http://messages.finance.yahoo.com/Business_%26_Finance/Investments/Stocks_%28A_to_Z%29/Stocks_Y/threadview?bn=27297&tid=302511&mid=306392), are going to issue the new shares at a price much below $3.31? I don't think so. Why would they need to? They are likely profitable right now. The only advantage YRCW has in reducing the debt is lower interest costs, and higher profit...so reducing the debt by dilution, even IF at a discount, increases the value of the company due to higher profitability due to lower interest costs!
By knowing that criminals very badly want your shares at these prices, you can hurt them by buying even more!
Everyone have a good laugh reading tx's criminal attempts to post misinformation.
He does not even seem to understand the basics of an equity issuance...which is that no matter how much stock is issued, if it's issued at the same price the stock is at when it's done, and if the company increase it's shareholders equity by an amount equal to the shares issued (debt for equity), then the value of the company STAYS THE SAME.
I say...ANYONE who relies on a message board, 100 pots a day moron for their investment advice DESERVES what they get. TX has as much influence on this stock as my farts do on global warming. ZILCH!
He's only relevant because a select few here have made him their very own pen pal.
moron, if they issue 100 trillion shares at $3 that would value the stock at 300 trillion. If they have to get $300 million to pay off debt that will cut the value of our stock roughly in 1/2 maybe offset a little by the elimination of interest exp, but then we'll get cut again when the teamsters take there piece for which there will be no offsetting value to the existing shareholders.
It doesn't matter if they issue a trillion shares or 1 share. The value of the existing shares DO NOT go down if the equity to debt swap is priced at or above the price of the day it's announced.
It is a circular discussion unless potential long term profits are calculated.
No one knows what that is, but, lenders have been flexible over and over again. This company turns huge numbers.
Why do you think lender are still in the game? Do you presume to know more than the lenders do about YRCs' potential?
TC won't bother telling you that dilution doesn't harm sharedholders, by definition. It depends on what shareholders get in return,. and giving shares to the bank isn't free, they get an increase in shareholders equity when their debts are reduced. The only harm done to shareholders potentiallt is the price at which theh deal is done. And dont expect to see a price much lower than it is already, given how undervalued YRCW already is.
Now that YRCW is expected to be profitable in Novemebr, there is no f'cking reason why the banks would have much leverage.
His hedge fund bosses are likely f'cked from spending tons of money on credit default swaps that pay out in the event of a YRCW BK that likely won't happen. They have him lying on full gear.
You have no credibility anymore...your bottom predictions have been wrong...your "head fake" prediction was wrong...your "buy heavily" recommendations have been poorly timed...the only thing you have going for you is your allegations of criminal activity and your alleged high IQ...