Freeport-McMoRan (FCX)

[eddy2]

Guys you can run a deficit up too 50% of the outstanding shares. So if there is 150 million in equity you can take on a deficit of 75 million your credit limit. I think we are still well in the allowable credit range from the last stated financials. Plus if the shares are trading higher then the stated equity value plus deficit new shares can be issued if and only if the authorize shares state they can. This was clearly the case when the stock fell to five a while back opening up the spread and revenue spread for the sale of equity.

Was it diluted, yes. Did it provide too much liquidity? Not at the moment, maybe once the preferred shares are allowed to be converted in late December. Has the credit bar been raised? Looks to be the case.

I dought anyone will be getting a notice to vote on increasing the authorized shares due to the fact that this is now controlled by the preferred share holders, unless your a major holder of the preferred shares.

I’m siding with Sly on this. Eddy is making a mountain out of a little bit of debt collateralized by product and sales purchase tax reimbursement.

It’s done all the time when it exceeds that what the management feel comfortable in dipping into.

No big deal here for me.

Rock on Sly.