Perhaps you should better look elsewhere to put your money if you don't get this. Realizing revenues and collecting cash does not necessarily fall into the same period. Actually the company is shipping the majority of their products in advance to big holiday seasons and offers their customers some time for payment. So the cash increase on the balance sheet is from revenues already realized in prior quarters. The corresponding accounts receivable balance is down heavily accordingly.
Well this is VERY basic knowledge.
Look at the guidance "We expect fiscal year 2016 sales to contract considerably relative to the prior year, and operating losses for fiscal year 2016 to be similar to or greater than fiscal year 2015 losses, excluding goodwill and long-lived asset impairments,"
They burned $100 million in FY15 and they now expect losses to be similar or even greater than in 2015. Cash will shrink considerably again.
No strategic alternatives announcement.
Well, it is ugly. Accounts receivables are down $80 mln but cash is up just $33 mln. Inventories still way too high at above $70 mln. Wondering why they don't write it off.
Details are out now and I pretty much nailed it except for the very poor pricing.
The offering dilutes the DRYS stake to below 50% but coupled with the CEO's stake GE still maintains control over ORIG.
Outside shareholders got diluted by 21%
The company gets $200 mln in gross proceeds, enough th compensate for the DRYS loan and the dividend.
Use your brain at least this time. The sole reason he is buying shares is to ensure ongoing control over ORIG as the DRYS controlling share will most likely be diluted to below 50% in the offering.
There will be plenty of dilution for outside shareholders of course.
they could and perhaps they will but they will issue even more new shares in the offering - otherwise the CEO wouldn't have to commit to buying new shares
This is just plain dumb. Why don't you ask yourself about the $220 mln cash drain due to the DRYS loan and the unsustainable dividend just to keep the parent afloat ? Now ORIG shareholders get diluted substantially because of this ill-fated connection.
it was just an example but they actually wasted $220 mln for the DRYS loan and the dividend so I guess they would like to replace these losses
They will most likely try to sell around 20 million new shares at $7.50 which would bring the DRYS stake slightly below 50% but coupled with the CEO's stake will still allow total control over ORIG
Dream on. They should have eliminated the dividend to save $100 mln annually. But of course that's bad for DRYS which desperately needs the cash. And they should ask DRYS to pay back their loan.
This offering is effectively a DRYS offering.
The company is obviously issuing new shares otherwise the CEO wouldn't need to buy any shares in the offering. If they were just selling shares out of treasury his stake in the company wouldn't change at all.
It will be quite interesting to see how much shares at which price they will be able to sell tomorrow. If the offering will be oversubscribed the bigger names might also want to chase their luck.
Nonsense. They were recently forced into an ill-fated loan deal with DRYS to help the parent company stay afloat. Additionally they are still paying $100 mln in annual dividends which mostly go to DRYS also.
Now they are lacking that cash and diluting shareholders with the share price close to multi-year lows.
This is effectively a DRYS capital raising executed through ORIG.
Raising $200 mln would mean 20 percent dilution by the way.
clearly not what investors expected given the strong setup into the close. Europe is a bright spot but the US weakness looks concerning. Sell
You also need to know that NONE of these contracts announced during their current promo bus tour is actually new. They all have been recorded in backlog or (in case of Home Depot) even already been delivered for some time. They just held back the details for their bus tour to pump up the share price. Today's Balzac contract will have to be delivered pretty soon as the new facility already nears completion. Wal-Mart placed this rather small order months ago.