My take on the secondary is preponderous of insider stock and some new shares. This gets some cash to company who is floating registration costs, gets cash out to presumably hardworking key people in the name of getting more stock out in the market.
Let's see: 25 million shares o/s x $30 per share X 5% dilution factor results in $37,500,000 gross (not net) tohe company by issuing 1,250,000 shares.
Can insiders conceivably sell 5% of company that it owns? If they could that would double the new shares going out into the float
That would be a $75,000,000 which should be of interest to some big boy.
As the actual offerring events play out, look for stock price to be very weak as big boys pressure the stock southward for better deal for their clients, making them look good in their clients' eyes while insiders get it in the shorts. Street view is: "what are the insiders crying about (they've made of ton) we want our beak's wet now for taking the next chance with you".
For those of you who believe in the Company, it'll be a good time to add to positions at levels that the company may ever see again. I, for one, do not have that level of confidence at this time.
These is my opinion based on similar experiences with CHKPF and MRVC. Do your own due diligence on this stock.
Ed Plopa |
