It is a huge step in the right direction to be able to move away from Preferred financing. GMGC does not have the clout to attract a top tier firm for this task, however I believe they are comfortable with the interest they have received from Institutional types regarding investments in the company.
The Institutions, should they desire to take a decent size position (and I feel GMGC has an idea that they do), have to worry about pushing the price higher than they want in order to complete the purchase of their positions. With this deal, GMGC can "let them in", without it distorting the price in the short term. ( I know they didn't care the other way, and I would love to see the price rise ). GMGC benefits from the credibility and stability of their ownership, as well as from the cash. It is the right deal at the right time, imho.
Unfortunately, it pulls the larger Institutions out of the general market in the short term, which is not a plus for the stock price. It will be up to others to see the light and buy in. This is offset by the signal it sends about the Preferreds, imho.
Regarding the timing, to me this signals that the Preferreds are nearing completion of their conversions. GMGC can now afford to pull the Institutions out of the market without killing the stock price. Also, the Institutions will be more apt to buy in if they know the Preferreds' affect is diminished. It shows them a healthier company. The short term could see some price swings as the market fully digests this move and the Prefereds finish their business, however it is another in a series of positive moves by the company, imho.
Seconds Out. |
