To all - COG/COGIF restricted/escrowed shares
I've kept wondering why the stock has been weak over the past few months in spite of great fundamentals so I thought I'd dig back into the IPO document and check into the provisions around insider shares. Here's what I found in the section entitled "Shares eligible for future sale".
First of all, a review of the IPO dated October 2, 1997
The company had 10,686,560 shares issued. 3,080,000 were being offered to the public (and free trading) as part of the IPO and the remaining 7,606,560 had restrictions of one type or another on them by both US and Canadian authorities.
US provisions
-------------
The 7.6M shares held by management were restricted under Rule 144. Of these, 5.4M could be sold as of the issue date under Rule 144 with the remaining 2.1M being eligible "for sale in the public market pursuant to Rule 144 at various dates thereafter through May 9, 1998. With this date now passed, I assume that this means that these shares are now free to trade unrestricted in the US.
To the underwriters, the company also committed 6.5M shares to a lockup period of 180 days (this date was passed in March 1988).
Canadian provisions
-------------------
Management entered into an escrow agreement whereby 4.1M of their shares were deposited. These were then to be released from escrow according to the following schedule:
- 10% ( or 417,811 shares) to be released nine months following June 25, 1997 (i.e. March 1998)
- 20% (or 835,622) to be released after each of the first, second, and third anniversaries (i.e. starting June 1998)
- the remaining 30% to be released after the fourth anniversary.
Conclusions ??
--------------
I don't know if I found a factor contributing to the weakness or not but thought that this information might be of interest to some here. This issue is complicated in the IPO so anyone else with a copy might want to cross-check and validate the information above. |
