The Merge and Dilution---
James wonders, "I guess what I was really wondering concerns the possible dilutive effect on the share price: if my bazillionth of the company is currently worth $37.xxx and all of a sudden there are a whole lot more pieces of the pie to hand out, doesn't the value of my nanoslice go down?
"And if these additional shares are used to purchase USRX, isn't the 1.75 per USRX share not really worth 1.75*37.xxx but rather something less?..."
Well, here's why I'm not worried (others will surely supply their own reasons): The concept of the merger-of-equals is that there are supposed to be more shares, because the company is bigger. So, when the merger is done, your COMS shares are a smaller piece of a bigger company, and you have something of the same value, and my USRX shares are an equivalently smaller piece, and also have the same equivalent value.
This assumes, of course, that the conversion ratio is about right; otherwise one kind of shareholder loses at the expense of the other kind. Just after the merger was first announced, the discussion in the USRX topic was "we got screwed... they paid too little for USRX" while the discussion in the COMS topic was "we got screwed... they paid too much for USRX". This is probably a good sign that it's in the right ball park, anyway.
Now, what Eric B and Casey C are trying to convince us all, in the recently mailed proxy solicitation (I haven't seen mine, yet... just the copy on EDGAR. Anyone?), is that there will either be some synergy or some cost savings to be gained from the merger, and so everyone will gain from the deal. Vote, and we'll see. |
