Saturday, August 29, 2020 2:20:51 PM
The problem is that nobody knows what the share count will be. Is the government only diluting common by 80%. Okay. Now the new investors.
Are the new investors going to buy the shares at a 7% ROE?
How about 8%? No? Probably 10/11%.
Now. How many shares need to be sold to raise the capital. You've been paying dividends on the SPS for 12 years and these are highly profitable companies?
Are you going to leave the higher parts of the capital structure to die and whither while hoping that the new money ignores all of that?
In ways, they will. As long as there is a signal that the new investors will get a fair shake.
I don't think that you get there without paying dividends on common stock from the get go.
By "get go", I mean at the SPO offering.
We'll see.
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