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Strategies & Market Trends : Natural Resource Stocks -- Ignore unavailable to you. Want to Upgrade?

To: Brinks who wrote (20244)	1/20/2005 3:15:43 PM
From: jimsioi	Read Replies (1) \| Respond to of 108681

Brinks, STormCat, was up 10% now 3-4% Acquisition does appear to fit the pattern for growth described ... Sure would be great if the stock were to get over on the AMEX.. Perhaps the financing of the deal had something to do with the current weakness.... "Storm Cat will finance this acquisition through a combination of debt and/or equity. The equity financing will consist, subject to TSX Venture Exchange approval, of a non-brokered private placement of up to 3.2 million Units at a price of CDN $3.90 per Unit. Each Unit will consist of one common share and one common share purchase warrant (a "Warrant"). Each Warrant will entitle the holder to purchase an additional common share of the Company for a period of two years at an exercise price of CDN $5.20. A finder's fee of up to 7% percent of the gross proceeds is payable in cash or, subject to the acceptance of the TSX Venture Exchange, in stock. Storm Cat Energy (USA) has already paid a 10% non-refundable deposit (US $855,000) to Palo against the total purchase price." The way this transaction seems structured allows the buyers of the new equity to play several games all injurious to common shareholders, including shorting the stock prior to the issuance of the shares in the knowledge that they had the warrant as back up...These private placements with warrants STINK...Did UPL and KWK, which believers in this issue like to point out as an example, raise capital in this manner...?? It'll be a long time before they reach the Big Top (American exchanges) if they do financing this way....I hope somebody will straighten me out if I am wrong...