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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: benwood who wrote (13663)10/19/2004 2:09:04 PM
From: mishedlo  Read Replies (2) | Respond to of 116555
 
One plunge of FAX was triggered a rights offering to sell new shares for sub-market value. As KT pointed out at the time, rights offerings are designed to benefit the management, not the shareholders. FAX management backed off after a lawsuit was filed by a major stockholder. Perhaps this is the incident to which you are referring? It was about a 20% haircut as I recall.

That is indeed the incident.
Why would anyone choose to purposely screw shareholders this way?
Obviously it benefitted management in some way.
What a crock of horse shit.
a 20% loss overnight in a bond fund with no interest rate or currency moves is preposterous. If they were prone to do this again I would not do business with them.

Mish



To: benwood who wrote (13663)10/19/2004 2:38:12 PM
From: KyrosL  Read Replies (1) | Respond to of 116555
 
Although the FAX rights offering would have benefitted management, if would have greatly benefited the shareholders too. The proceeds of the rights offering were to be used to buy emerging debt, the kind that soared since the rights offering was abandoned.


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