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Thread: Comvita - CVT

  1. #1611
    Senior Member moimoi's Avatar
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    Quote Originally Posted by bottomfeeder View Post
    Never really understand why public companies hold long term debt. Ok they base it on return on capital. But they have access to capital raising. Its not as if they never have to pay it back. I say cease dividends and raise capital to repay all debt.

    Now you might argue gearing helps you make more on the existing capital, but is that really the case.
    Equity is more costly than debt.

  2. #1612
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    Not in this company.

  3. #1613
    Senior Member moimoi's Avatar
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    The dilution to existing equity from the cap raising will be costly

  4. #1614
    Legend Balance's Avatar
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    Quote Originally Posted by moimoi View Post
    The dilution to existing equity from the cap raising will be costly
    Depends on type of capital raise (pro-rata rights issue, placement to selected institutions and investors or combo) and whether existing shareholders choose to fully participate.

    IN any case, one look at the chart and it's stand aside!
    Last edited by Balance; 27-02-2020 at 09:17 PM.

  5. #1615
    Legend Balance's Avatar
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    Quote Originally Posted by Balance View Post
    Depends on type of capital raise (pro-rata rights issue, placement to selected institutions and investors or combo) and whether existing shareholders choose to fully participate.

    IN any case, one look at the chart and it's stand aside!
    Sp now $2.20.

    49.6m shares issued - let's assume CVT needs to raise minimum of $50m to keep the banks happy?

    So $1 per existing share to be raised.

    So 1 for 1 rights issue at $1.00?

    Now if the banks require full repayment - will have to be a 2 for 1 at 45c?

    Certainly the underwriters will want plenty of margin of safety!
    Last edited by Balance; 28-02-2020 at 11:32 AM.

  6. #1616
    Speedy Az winner69's Avatar
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    Quote Originally Posted by Balance View Post
    Sp now $2.20.
    It was $13 not that long ago......and punters thought they were wonderful ....even though financials (especially cash flows) were sending out messages things weren’t that good.
    “ At the top of every bubble, everyone is convinced it's not yet a bubble.”

  7. #1617
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    Blood on the floor here.

  8. #1618
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    Quote Originally Posted by winner69 View Post
    It was $13 not that long ago......and punters thought they were wonderful ....even though financials (especially cash flows) were sending out messages things weren’t that good.
    The illusion failed to become the reality.

  9. #1619
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    When the tide goes out, you can see who is swimming naked....

  10. #1620
    The past is practise. Vaygor1's Avatar
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    Quote Originally Posted by Mogul View Post
    always harder to sell a turd in market melt down phase

    Yeah lol... Gross Profit up by $8 million.... riiiiiiiiiiiight.

    Perhaps they should start specialising in how to make a silk purse out of a pigs ear.

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