Thursday, September 14, 2023 6:27:36 PM
Tim Howard is absolutely wrong on this front. 99% > 79.9%, it's basic math. The pre-capital raise commons in aggregate will be worth the exact same amount whether Treasury writes off the seniors or converts them, because outside investors have no reason at all to care which of those two happens.
Quite the opposite: Treasury believes that writing the seniors off for nothing is what is illegal.
Treasury's AIG preferred shares didn't have a conversion feature either, and that didn't stop the conversion from happening.
I think the preferred conversions will be structured in such a way where Treasury and the juniors (the two parties that would be negotiating, as they negotiated in late 2020) would each get an acceptable percentage of the pre-capital raise equity. In the scenario where Treasury exercises the warrants and writes down the seniors, that could be something like 80% for Treasury and 15% for the juniors, leaving 5% for the existing common. That gives a share price of just under $7, but that assumes that no capital needs to be raised so it's basically an absolute maximum. When put into ratios that would be about 8 commons per $50-par share and 4 per $25-par share, assuming the conversion only depends on par value.
If Treasury decides to play hardball and insists on more, we could see an AIG situation where Treasury ends up with 92%. The juniors would probably get 7% and legacy common 1%, leading to a ratio of around 19 commons per $50-par share.
CBD Life Sciences Inc. (CBDL) Launches High-Demand Mushroom Gummy Line for Targeted Wellness Needs, Tapping into a Booming $20 Billion Market • CBDL • Oct 31, 2024 8:00 AM
Nerds On Site Announces Q1 Growth and New Initiatives for the Remainder of 2024 • NOSUF • Oct 31, 2024 7:01 AM
Innovation Beverage Group Receives Largest Shipment of its Top-Selling Bitters to Date in the U.S.-Ready to Meet Growing Demand from Expanding Distribution Network • IBG • Oct 30, 2024 12:22 PM
Element79 Gold Corp to Update Investors on the Emerging Growth Conference on October 31, 2024 • ELMGF • Oct 30, 2024 9:08 AM
CBD Life Sciences Inc. (CBDL) Announces Grand View Research Report Findings on High - Growth CBD Equine Market, Aiming to Drive Unprecedented Shareholder Value • CBDL • Oct 29, 2024 10:19 AM
Integrated Ventures Announces Partnership And Lease Agreement with Driptide Wellness - Leading Health and Wellness Provider. • INTV • Oct 29, 2024 8:45 AM