Originally Posted by
Beagle
Their insatiable requirement for new capital, ($25m last year with new convertible bond issue), $30m now and conversion of existing bonds next year, another $25m if everyone chooses shares on redemption but only quite mediocre EPS growth is starting to concern this hound, as did the depth of the discount to current SP of this issue and going to the market before the election and having to have it fully underwritten, (I presume at significant cost) at first sniff gives this hound cause to reflect. Also concerning is the way in which a major shareholder exited their shareholding and the way the shares have been in a downtrend for some time. The quite serious lack of liquidity in the shares is another area of concern as a bondholder and it is by no means a given that I will convert my bonds to shares at the end of their term next year as whilst a theoretical 5% discounted to VWAP sounds fine, it isn't if there's a woeful lack of liquidity when trying to sell down and that theoretical 5% discount could easily work out to be insufficient.
The low forecasted EPS growth leaves me pondering if this isn't just another mediocre company and certainly not capable of the 25% EPS growth some shareholders have been implying. Whilst headline profit growth looks good, EPS growth is hardly inspiring.