This offering is not dilutive as no new shares will be issued to the public. These shares already exist. But, the people selling them are on the inside and have seen the stock go above 32.00 and are willing to sell just a few months lated for somewhere around 22.00. You don't need tea leaves to get the picture. They want out at this price because they don't see a better price any time soon. To look at this any other way ignores human nature and reality. I got out at 24.11 a few days ago. I believe this stock is going to drop into the teens. Remember what the IPO went for(low teens) about one year ago. Unfortunately there is no such thing as a safe 20% dividend. GLTA!
"This offering is not dilutive as no new shares will be issued to the public. These shares already exist. But, the people selling them are on the inside and have seen the stock go above 32.00 and are willing to sell just a few months lated for somewhere around 22.00. You don't need tea leaves to get the picture. They want out at this price because they don't see a better price any time soon."
The other negative aspect is that it increases the float and thus increases supply (of units in the market). Increasing supply tends to push down prices, even when not dilutive.
But your point about management still viewing it as a sell at $22 (when the prior offerings were at a much higher price) is the important point.
If the offering is at 22.85 why is the stock trading at 22.30 this morning. Must be a lot of disappointed stockholders like me wondering how come we are the guys that always get the shaft. I am thinking of selling all my stock positions and never getting back into this market ever again as it is being manipulated by big shareholders and day traders.
Sentiment: Strong Sell
Indeed, when you actually read the release the offering doesn't increase the number of shares. There is no dilution. After-hour selling was knee-jerk response to the headline 'public offering.' I think NTI has a lot of upside, frankly. Coming up with a .68 cent dividend in a quarter when your refinery was offline for more than a month is a sign of strength, to me. The next quarter will certainly be better and as was pointed out in today's earnings call, the refinery is running at an all time output high. Not many other 20-30 dollar stocks that I own can boast .68 cent quarterly dividends. As far as insiders jumping ship, I think its really just some good old fashion profit-taking.
With a new target price of $27, B of A sees it your way, however, all tea leaves* aside, the market most likely here is only reading and reacting to the headline about the sale. Now for the rest of the story from their press release....
"the Offering has no dilutive effect as the number of common units outstanding will remain unchanged after the Offering."
-nuff said. The dip caused by the non-dilutive sale seems then to have created a buying opportunity...a temporary bargain if you will, especially since there should also be the usual run-up to the ex-dividend date on 8/20/13.
*I prefer tarot cards ;)
Sentiment: Strong Buy
No need to be so negative yet as this is common in the years following an IPO, not necessary problems. Typically, such an offering occurs when the founders of a business (and perhaps some of the original financial backers) determine that they would like to decrease their positions in the company. This kind of secondary offering is common in the years following an IPO, after the termination of the lock-up period. Owners of closely held companies sell shares to loosen their position - usually gradually, so that the company's share price doesn't plummet as a result of high selling volume. This kind of offering does not increase the number of shares of stock on the market, and it is most commonly performed in the case of a company that is very thinly traded.
This stock sale doesn't benefit the company. And it doesn't change the share count. From yesterday's press release:
The Partnership will not receive any proceeds from the sale of the common units in the Offering and the Offering has no dilutive effect as the number of common units outstanding will remain unchanged after the Offering.
I hope it does go into the teens because then I can scoop up some cheap shares. What you don't seem to get is that people are willing to buy shares at these prices. If they weren't the offering couldn't take place.
Sentiment: Strong Buy
You mean this is like owning the goose that lays golden egg? It's lays an egg or two but you sell it anyway and buyer's think this goose will lay eggs forever but can't understand why you sold this goose. What the buyer didn't know, and the seller knew, the goose has cancer.
First of all, using a weak analogy just weakens what the point you are trying to make. Use comparison and contrast if you want to make a case. NTI is not a goose and it doesn't lay golden eggs...but it does pay a nice dividend. If one is long term they will pay off your entire investment in very few years whereas sitting in a FB or some other company with mark to fantasy value with no real earnings and no dividend is for pure momo speculators. I have only recently gotten into NTI and will buy more if the very short term weak hands panic and hand me a deal. I have been known to stop and pick up money off the street if it is laying there.