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Gold/Mining/Energy : Capital Alliance Group - CPT (CDNX)

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To: marcos who wrote (219)4/3/2000 4:18:00 PM
From: keith massey  Read Replies (1) of 960
 
As for cpt's cash, you can only count the five millions canadian they have now, right? ... since this from the 22% seed capital portion is on SEG's books, and is counted in cpt's 78% of SEG ... or do i have this backwards ... could be

Yep, you have it backwards. I'll do it the simple way for fun.

- CPT owns something (SEG)
- People (Investors) want to buy part (22%) of that something (SEG) from CPT for $10 million US.
- CPT gets the $10 million U.S for selling their chunk (22%) and owns less of that something (78% instead of 100%).
- If people (Investors) think that 22% of that something (SEG) is worth $10 million US than it stands to reason that the part that CPT didn't sell (78%) is at least worth approximately 3.5 times what the buyers were willing to pay for it (78/22 = 3.5) or the amount in your calculation.

So they get the cash plus the value of the piece they own. And yes, add the other $5 mill, CIBT, and this is not based on the IPO price or speculation value<ggg>

This is similar to when TD Bank sold 20% of Waterhouse to the public last year through a NASDAQ IPO and took the cash. Look what happened to TD price in the weeks leading up to listing (I played that one <gg>). There are dozen of other similar examples.

Best Regards
KEITH
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