One further estimation on RRRR.
(a).... I'd expect that the deal closes. At the prevailing stock price and with the apparent liquidity, Apollo should have no problems to insure their investment. Hence, Apollo will walk away with a nice gain and still holding quite a share of RRRR.
(b).... A 2nd or third placement of stock can be bullish, I may cite NITE, or DCLK or even ITVU or SOFN as far as I remember. An ordinary 2nd placement is antidilutive to the (usually smallish) common equity, in every view, at it increases the portion of equity by far and adds cash to the coffers.
(c).... What riddles me is that it is Apollo which did the deal, and the terms of the deal. There has been cited TUNE. But TUNE may be a different story, as the investor (Liberty) has proven that he is interested in shareholder value and he ups his 80%ish stake to 94% in exchange for its whole Internet business.
Reg. the terms of the deal. A more bullish tune would have been, if Apollo did the deal "at the market", or with a premium, which is usual if you acquire a bigger stake of a company. Here, the deal has been done at a stiff discount to the market price.
(d) .... As mentioned by other posters. Although I personally expect that the deal closes, it is ... till now not a done deal. In fact, the silence around the company is quite disturbing.
The fact that Apollo may seek to invest cash into RRRR at a rate between $5 and $6 per share tells us that it has been a compelling buy beyond $5. So, you may ask why $6 and not $16. Because Apollo is a financing company and no Liberty, or AOL and may be dedicated to reduce their market exposure.
(e) .... Don't forget the "sell the news" effect. It could lead RRRR down to $10 and under, once the news about the closing are released and not the stock trading between $13 and $16.
IS. |
