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Gold/Mining/Energy : Swift Energy (SFY) -- Ignore unavailable to you. Want to Upgrade?

To: FloydP who wrote (841)	7/26/1999 6:41:00 PM
From: Mark	Read Replies (1) \| Respond to of 1602

Floyd, I hope the $10 rumour isn't something I started over at Yahoo! FWIW, my thinking is as follows. It is normal to make a share offering at a price slightly lower than the recent average. This is to make it reasonably certain to fly (the underwriters like things stacked slightly in their favour, prefering to offer insurance solely against a market crash rather than the "over enthusiasm" of a management team). $10 just happens to be a nice round number at about the right level, hence my suggestion. HOWEVER, the current SFY situation is slightly unusual in that there is both a debt and an equity offering, and TWO underwriters/advisers are involved (with slightly unclear delineation). It strikes me that this is potentially a mistake (and I'm still trying to work out WHY two parties are involved *). When there is one professional adviser, you can be pretty sure of making a sound deal - i.e. you agree an offering price (which may not be the best price, but which is unlikely to be a bad price), and then everything is taken care of. The one adviser is taking on the total risk (though may farm out the financial risk), and is highly motivated to make it work. However, when two parties are involved, and if there is professional rivalry, or simply because of the scale, then I suspect* they are less likely to feel the same burdens of ownership & responsibility. It is much more likely for news to leak out, and for "insiders" to benefit - i.e. someone shorts the stock and then acquires new stock to cover at the issued price. This helps to drive the price down towards the issue price. Now I'm not saying that this is happening here, just pointing out that brokers & investment bankers are sometimes rather less "honorable" than you might hope...... (certainly more arrogant/complacent). Perhaps this is what you might have been suggesting? <VBG> I think things should settle down in the next couple of weeks once these deals are secured. Neither adviser will be keen for the third-parties they've introduced to loose out....... FWIW - SFY was down by 1.7% today, but it is perhaps worth pointing out that Apache and Anardarko (which I have been watching) and PETD (which I own) were also down today - by 1.6%, 5.8% and 2.1% respectively. I'm surprised by it all....... (and don't think that SFY is in any particular trouble here). For those who have not already seemn it, IBD just had an article about NG stocks being in vogue at the moment (that's probably the kiss of death!). Anyway, since I am a distant cousin who doesn't get IBD, I thought the following summary might be of interest to others in a similar position - messages.yahoo.com Mark ** Does anyone think that two advisers are involved because two parties are involved...... Hum.