Actually, his math was OK... as far as the number of shares in the conversion.
Mine says there "should be" 20 pre reverse, or 2 post reverse shares of ACLE for every 1000 PGPM shares.
Why ?
You get one tranche because PGPM holds 12.5 million pre-reverse ACLE shares, which converts to .008064 shares of ACLE per PGPM share. That might drop to .00625 per share if PGPM dilutes to 2 B shares. That works out to 8 pre reverse ACLE per 1000 PGPM.
You get a second tranche because Lariat owes PGPM $40 million, and the only way they can properly settle that debt is in shares or notes of ACLE. I assume they will use $2.25 an ACLE share in computing a price for making a deal. That would work out to around another 17.8 million ACLE shares for PGPM holders... which together with the first tranche, looks like it should work out to around 20 ACLE per 1000 PGPM shares.
Then, the reverse applies, and the 20 ACLE becomes 2 per 1000.
More might come from ACLE notes held by PGPM, or from the ACLE notes held by Lariat if they use that to pay off their note to PGPM... So far, it looks to me like the transfer of assets to Lariat for a $40 million note, which were then transferred to ACLE for shares, resulted in Lariat taking around a 30% or 14 million ACLE share "bonus" on the deal... or a direct transfer of one ACLE share per 1000 PGPM from PGPM to Lariat... again with more depending on the $7 million ACLE note to Lariat.
I don't think it is a "good deal" for PGPM holders to lose around 1/3 of the value that there is... in what looks to me like nothing but a direct transfer of assets to management without justification... since they are already obligated to give their best efforts by virtue of their positions at PGPM.
Management has been holding shareholders hostage, and it looks like the price they are imposing to get some of the potential realized, is 1/3 of the value.
The only other way I see from here that they could end up transferring even more PGPM shareholder value to Lariat than they are transferred already... would be for Lariat to buy up larger block of PGPM shares instead of ACLE buying the PGPM shares.
I think if they try to do a deal that has any less than I've outlined as looking like it is going to a PGPM shareholder, that would make it a bit more likely that someone will sue, and more likely that following a civil suit, someone could end up going to jail.
I can't come up with a rational reason for PGPM shareholders to get less. I can easily come up with reasons they should get more... with a better composition or price in the deal from Lariat, with recognition of value in the ACLE notes, and with a better price paid for PGPM shares.
I don't have any information others don't have. I'm just reporting what I "think" they ARE doing, based only on my best guess, which is based on what we have been given and what we do know. There is room for surprise on the upside... which would really only boil down to the benefit of not getting robbed.
AI
