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Strategies & Market Trends : Three Amigos Stock Thread
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To: Dave Baker who wrote (2156)3/25/1998 9:26:00 PM
From: RADAR )))  Read Replies (1) of 29382
 
Dave in KC:

RECY

From the filing I found the following statement of RECY's reason for the offering:

Use of Proceeds.The net proceeds from the exercise of the Warrants,
if any, will be used to complete future acquisitions and for
working capital purposes.

While there will be some dilution to the value of the stock when the warrants are exercised, most of the warrants are not immediately exercisable. I have read the prospectus very quickly, too quickly to try and post anything but a guess as to the short term effect the warrant/stock issue will have on the price of the stock.

RECY still intends to become the largest metals recycle business in the US through it's acquisitions strategy. That does take capital (warrants, stocks and cash) to make such a strategy work. Any capital raised will be used for operations or acquisitions, both of which will add value to the company. The stocks and warrants that are sold will also be used to pay off both long term and short term debt, at a substantial savings to the interest being charged on the loans. I believe the stock/warrant additions to be a necessary and not unexpected event if RECY is to continue down the acquisition trail.

All of this is certainly only my opinion. I would appreciate any comments or conclusions from others who have read the prospectus.

RADAR
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