Re: Ithaca Halted !!!!!
in response to
by
posted on
Jul 08, 2010 01:47PM
Edit this title from the Fast Facts Section
I am not so enthused by this development.
Think of this:
when the SP was at 3.00 the market cap was around 486,000,000 (162,000,000 shares issued fully diluted assumed)
now with 93,000,000 more shares to add to the pot, share holder value will decrease.
to get back to a market cap of 486,000.000/255,000,000 shares = a SP of 1.90.
If the 12-18 month target price when there were fewer shares out, was 4.20ish
The new target price should now be around 2.67. I am waiting to see a new broker note, and there should now be more coverage by CIBC at least.
This is a kick in the teeth as far as I am concerned. Sure it will be nice to start up the Stella area quicker than first anticipated, but not at the value to share holders.
If they are moving up production to nearer terms, then that should help with share price faster as well.
But I don't see how the company could now get the best share holder value over the long term for someone like me.
Although my voice is small in comparison to the II's, I would not be voting for share option packages for these guys anytime soon.
Good management makes good decisions that benefit all shareholdrs over the long term. This is not a good deal, and I can't see how we the shareholders don't get to vote on whether this is acceptable since they are increasing the float by over 50%, closer to 60% i would imagine. Shouldn't the securities regulators be having a look at this deal?.
Why price it down to 1.70 when we were north of 2.00 and even with 3.00.
If you are going to do a financing to speed up development, then this should have been priced higher, I would be satisfied if the SP was at a 10% discount to the SP that would have recovered if the company had just stuck to the plan.
Does this mean that they are in trouble with getting a line of credit facility as was promised by the end of June? I find that hard to believe unless they anticipate production problems in the near term.
Pretty convenient is you ask me.
Thumbs down. I might just sell and find another horse.
AndyK