and just where did you get the new o/s share count to 20 mil?
always show your work :)
As many have penned last night, the deal announced only will add 600k shares (barring warrants at $5 strike).
Yes it did trade very heavy afterhours. It's almost like everyone that bought then flipped as folks thought "OMG 75 million shares are coming." Which as we know, is not the case.
If everyone just took the time to read the 8-K.
A post entitled "The Facts" should point out that the company is only putting out the authorization to issue up to 75 million shares.
In reality, this deal is only issuing 696,572 shares of stock.
It's easy math. 2,438 series E shares, each share valued at $1,000 (and at a $3.50 strike), gets you to the above number of shares.
There won't be 75 million shares hitting lol
Never seen such idiots posting before on a board. It's all right there in the 8-k.
There IS the potential for another 1.5 million shares to hit, but they are warrants, and at a $5 strike. I think everyone would be very happy if those got exercised, as the stock would be north of $5.
Calm down everyone.
There is no 75 mil share dilution coming.
look at any company (even large caps), go to their balance sheets, they all have X shares o/s, Y authorized.
Nothing more to it than that. Your math checks out.
wow, you really don't know eh? I will gladly educate you.
Many firms/funds that trade in arb situations lever up. Meaning, say they had a million dollars (we're using low numbers for simplicity's sake).
In your world, you buy the million dollars worth of shares, stock goes up, you sell for 1%.
In the arb world, they lever that up 10x, so they use $10,000,000 with only $1 million, and that 1% move becomes 10%.
Yes, that kind of leverage is offered (and even more) still to this day. Don't confuse it with the measly 4x your etrade account will allow.
In arbs and special dividend stocks (such as MLPs) that unless something happens to the deal or they consistently support a certain yield, these funds will lever it up, multiplying their return.
The fun happens when a deal falls through, or one of them gets scared triggering a waterfall in the share price. Doesn't happen often, but when it does, it puts the careless firms out of business.
was this the worst timed post by you ever?