Value Microcaps Motherboard

[cliffvb]

RNO warrants..No doubt, Lundin has some formula they used to come up with fair value for the warrants to justify their buyout price being 13% less than the market price before the buyout was announced. But the fact is that they screwed both the warrantholders and the RNO stockholders (or maybe I should say that RNO mgmt allowed them to). Lundin advertised that they are paying a 22.9% premium over the average price of RNO stock for the last 30 days. That doesn't mean anything because the market didn't have all the pertinent information over the last 30 days. The market didn't know that the price of nickel would continue up over the last 30 days and hit a new record on the day of LMC's offer. Earnings were not released until 3/28 so the market didn't have that information until then either. Lundin actually only paid a 7.6% premium over the average price since then. It should have been a minimum 20% premium. Also RNO's Q4 earnings that came out on 3/28 were based on nickel that was sold at an average price of $14.44. Nickel is over 50% higher now.

LMC's stock was up 15% yesterday. Most metal stocks were strong but I would credit about 2/3rds of LMC's rise in price to the buyout news. That is about $300 million that went into Lundin's pockets that should have gone to RNO stockholder pockets.