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SWS Group, Inc. Message Board

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    • Well, my understanding is different. I am not asserting that mine is correct. I just want to throw it out for discussion.
      The $100M should not be added because it is a loan.

      What should be added is what SWS will receive if the dilution happens. They will receive 5.75 x 17.4M = 100.05M

      If dilution does not happen, the current BV stands: $11.05/share
      If dilution happens, the BV will be about $9.2/share.

    • You are absolutely right!

      I did not add the $100m investment.

      Thank you.

    • >>The combination of the trade and this fine is nearly a years interest on the new loans.

      Interest on $100m loan @ 8% = $8m.

      Fines .5m + .65m = $1.15m

      • 2 Replies to lou62m
      • I said the trade plus the fine, not the fine plus the fine. Trade loss was 6.3 million. 6.3+.650 =6.95 million.

      • Yep.
        Guys who did the financing are pretty sharp.
        I wish I could get the same deal.
        They get paid $8m (4m each) per year PLUS the right to receive 8.5m shares each at price 5.75 after 5 years.

        Basically in 5 years, $50m loan is exchanged for 8.5m shares @ 5.75.

        What i dont like is new BV will be reduced to 7.20 and a portion is still impaired.

        Also SWS grants 34% of company in exchange for $100m.
        What does that say about SWS value?
        It says SWS worth $300m.
        More than the buyout offer, but per share price is now only $6 because of 34% dilution or a 50% increase in # shares outstanding.

        Approx 32m outstanding + 17m new shares.

        I sold my position after looking closely at the deal.

        I think SWS will be fine in the long run,but I was interested in a quick move higher.

        So I am moving on.

        Best to all!

    • This I suspect, in combination with the last fine, is why we have a new CEO and CFO, not the bank issues. I believe this got one sentence in the last earnings report.

      It's 10% of what was actually lost from the trade. Pretty gross supervision failure if you read the finra report. They actually set daily trading limits at $999,999,999 for individual corespondants (tiny players who shouldn't have anywhere near that amount of trading capacity) and then didn't even monitor. They let the guy who did the net short sale trade before he even had a trading account or deposit. On the trade that went bust he put around $40,000,000 on each side with a net short overnight and couldn't meet the morning call. Cost SWS over $6million. Based on how they weren't supervising, they are lucky it wasn't $60 or even $600 million. The combination of the trade and this fine is nearly a years interest on the new loans.

      It's all right here:

      Long. I want to be on the same side as Bass and Ford. This is serious smart money. This new financing, and that its from Bass and Ford, is very good news.