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Pastimes : Clown-Free Zone... sorry, no clowns allowed
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To: NOW who wrote (192383)9/17/2002 1:40:06 PM
From: reaper  Read Replies (1) of 436258
 
not sure. IF they can get the money raised then the liquidity problem is solved (on an intermediate, 2-4 year basis). the problem is how do they raise $500mm. with the stock at $10 they'd have to sell 50mm shares, which is a lot of dilution. but imagine if it went to $5. then they'd have to sell 100mm. what if it went to $1? 500mm shares.

i'm not really sure where this set of equations solves. i actually have a feeling it has multiple equalibria -- i.e. the lower the stock goes the lower it goes, and vice versa (i.e. unstable system). i'm gonna think on it tonite, but right now i'm inclined to cover half tomorrow, and wait for the deal on the rest. once they get the equity deal done i'm gone.

part of why i don't want to wait around is that there are other sub-prime lenders still left to re-deploy capital to out there (a specific one in the mortgage business comes to mind <g>)

Cheers
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