Just very disappointed in the PPS action compared to the rest of the sector recently. This is a good board and I am trying to look at all the information as to the stock's future. I didn't do enough DD getting into this mess and I don't want to make a bad exit decision either. My main problem is the downward PPS that preceded the merger announcement. Obviously, this was known to be imminent by some whales which reflects badly on the company, so I think anyway.
FRO Oslo drop today puts it in line with NY finish yesterday, but if very many thought this was a good deal we would have seen the opposite in Oslo today. The fact is that the PPS fell nearly 7% yesterday on over 3x normal volume. We can pose different scenarios as to this merger's effects, but PPS is the ultimate barometer and its telling me that not many are seeing the merger as a positive for FRO commons.
Who the heck is Arctic Securities? Do they trade polar bear and seal skins?
Did Tradewinds buy the calls before or after the merger announcement?
No, the OSE closed at about the time we spiked to 2.52, then the news was further digested and the selloff began anew.
If you're correct this stock should have moved up about 300% today.
I don't doubt that the new entity will work to increase cash flow, just not on a per share basis. There not adding enough value with FRO 2012 to justify tripling the outstanding shares. EPS may actually fall as a result of this hosing.
Judging by the volume and large trades, these are big boy sellers or shorts coming in to take advantage of the soon to be discovered PPS of the diluted FRO stock.
Mr. Market is giving this merger a big thumbs down as the sector overall outperforms today. By Monday morning, some analysts will be weighing in and I suspect they will confirm what the market has already said which will just worsen the downside.
This stock is dead money at best for next 6 months with the merger not until the end of Q4 and the dilutive shares coming to market. Any price action will be based on what the analysts opine as to the future of this new merger. I am not sure if there are any execution risks to this merger. However, I am not happy about the PPS movement that occurred in the prior week as obviously some big players knew what was going down and when. IMHO, that speaks badly of the companies and their management and JF.