???????? You've lost me. I think you have missed most of my posts. I don't believe I have ever predicted a specific share price. Me-tooting:-). I think that's illegal in my state. In any case, whatever.
The company claims in their filing that they could have done the note deal by itself. Of course they had the capped call deal planned at the same time. Conspiracy?
I wonder if RIMA Senvest didn't come up with the idea as a way to get RAS to by their old notes at a premium.......I look forward to the explanation on the cc.....
For the old bond holders to get a 40% premium if they converted, the shares would need to go to about $10.50.............how likely was that?.....
Urascan21, the counter party will likely need to short something other than the actual RAS common stock. It is possible that they would short some, but more likely they would short some more liquid index simulating RAS common. RAS doesn't really have a large enough float to short 13 million shares. I'm not arguing for or against what they are doing.....I can't yet see the wisdom. I look forward to their explanations during the next cc.
You are reading just part of the filing. The point of paying the $8.8 million is to change the "effective" conversation price to about $11.9 per share. Essentially if the debt is converted at 9.5738 RAS will be compensated by the counterparty to make it the equivalent of $11.9.
The insurance is good until 2018. Read it. Well, you actually need to read it and be able to interpret it. Insulting me will not change the fact. I am not stating that the move is either good or bad. That has yet to be seen. 20 cent movements over a day and a modest increase in the short position do not prove the move to be bad..... Sorry, only a foolish reader would buy into that.
One thing it does is makes certain conversion will not happen at such low prices and flood the market with unwanted shares..........that would drive the share price down for quite a while....easy out for RIMA Senvest....
. So the note holders were happy to take a premium today rather than convert and take the ride or not be able to sell out all those millions at high prices with ease....seams reasonable.............why is management so confident that this is good? Are they that confident that the share price will rise to 9, 10, 11........12?
Well, it pushed the conversion price up from $7 and change to almost $12. That would appear to be the main motive.
Hard fax has posted some information regarding the capped call transaction. Basically they they paid 67 cents to get about $2.50 of protection. It would seem they are somewhat confident that the share price will go up to a point where the debt holders will convert. The question remains are they overconfident, irrational, or acting prudently in the best interest of the common shareholders?
Have you seen our buddy Al lately;-)
Hard to believe but he lost 100 pounds and is a vegetarian. Some health scare.....
I can't explain why others do what they do. I'm here on the RAS board to follow, learn and sometimes post. I'm optimistic about RAS's near term prospects and say so unabashedly. I'm long, but I am fully aware that RAS is just a company, one of many that I invest in and actively follow.
I'm watching the "new RAS" story unfold with great interest.
Gosh golly gee..........why would RAS spend $8.8 million? I am befuddled. Mr. Geezer, could you explain? I wants to knows why......................and how's to write prose that will impresses yous.
From what eyes reads in that thar prospects thingee the bond deal was done byes itself. Noze ones made puts the guns to RAS head and Mades them duzzeit. Is theyze that delooted that's theyze believes the shares price coulda goes ups?
Unless I misunderstand, and I'm willing to be corrected again, the $8.8 million fee is an up front one time event. One should amortize that cost over the life of the loan. Depending on events, the loan could be any duration from a few months (if a conversion occurs early) out to 20 years if the put is not excersised and the conversion is not excersised.
I'm not really sure if it's a good deal or a bad one. RAS waisted their money if the stock doesn't go up meaningfully. They cut a great deal if the stock moves up meaningfully and the a conversion occurs.........
Thanks for the lesson, teach:-)
Can you tell me how long the capped call hedge lasts and how much of the the offering it covers?
My mistake was reading the press release only and not going to the filing itself.
The poster was either dumb, ignorant or attempting to mislead. The offering cost RAS 3.28%......in fees.....a great deal. Even on Wall Street no deals get done on debt that cost 20 mil to raise 140............just plain stupid post.
$139 million of new cash @4% First, Let's forget about how much old 7% convert can be bought back.
They have showed that they can generate 18% when levered via the CLOs. So, that's a 14% spread on $139 million........generates $19.46 million annually....... Spread over 70 million shares means 27.8 cents per share extra. What do you all think that translates into extra share price and dividends?....