>> their <Q's> offering of shares seem greedy
I felt the same until I understood the situation:
1. The 4.6M share offering from Q is simply a form of equity financing. The alternative, which is debt financing, isn't as attractive to Q management, or me I might add.
2. The dilution will be <3%, which is trivial.
3. The price to the indexers will not be a sweetheart deal, which I had feared. I think it will be at today's closing price of 162 15/16.
4. Since the Indexers need 9.1 million shares, the 4.6M direct sale will not take away from our positive momentum, as they will need to buy another 4.5M on the open market. The reduction of open market purchases may just keep the price increase in a range we can hold, as opposed to a sharp <and non productive> round trip.
Nothing to fear, MKC. Everything's on the up and up, and Q is doing everything right. I raised a fuss because I was about to make a major purchase the next day, and wanted to understand the whole story. Once I did, I increased my holdings at 151, and am very pleased. The only negative was that some of the long time Qers were pissed at me for doubting management, but I think they've forgiven me.
As far as your final question is concerned, the indexers do not have to buy tomorrow <I believe they have a quarter to conform>, but they will. The reason is, they are judged by how closely they perform to the s&p, so they won't take the chance of letting Q get away from them.
Frank |
