Operating income is rarely ever used to do share buybacks.
If he converts debt in RIGH and TGGI, Baron could then use
those proceeds to invest into other private placements
like the two IPOs that were announced. If Baron uses the
money from converting the debt to buy the brokerage,
they miss out on the potential revenue and profit from the
other revenue streams. Simple business 101.
The creation of the 2M non-convertible preferred shares to be sold
at 50 cents at a 10% coupon allows Baron to acquire the brokerage
without having to use equity to buy it.
It all depends on the demand for the non convertible preferreds.
I would say the brokerage is no more than $250,000 and because
of that, I anticipate it happening this quarter or April at the
very latest.
Matt told me that without the brokerage, the business plan does not work.
He then said he will get the brokerage, no matter what it takes.
GO $BCAP !!
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