I never considered myself an expert trader, but I’m used to understanding at least the concept behind the fancy wording of the PRs. Now the situation got me a bit confused.
In short, company A signed a LOI to acquire company B to get to the big data market. A, B or C now doesn’t matter because the question is more technical. I read the press release and see this part in transaction details:
"Transaction Details
Pursuant to the terms of the LOI, the Company (A) will purchase the Business (B) for consideration of $32,350,000 (the “Transaction”), to be satisfied through the issuance by the Company of 64,700,000 units (the “Purchaser Units”) at a deemed price of $0.50 per Purchaser Unit, with each Purchaser Unit comprised of one common share of the Company (a “Common Share”) and one-seventh (1/7) of one Common Share purchase warrant (each whole warrant, a “Purchaser Warrant”). Each Purchaser Warrant entitles the holder thereof to acquire one additional Common Share of Xigem at a price of $0.60 for a period of 24 months."
The question: can they really do it? I might be overthinking but it looks strange. They expect to get to the $0,50 mark in the next 24 months? That’s over 300% from today (ok, from the previous close). Is it good for shareholders or something’s not right?
Submitted November 01, 2021 at 12:17PM by RelativeSquare0 https://ift.tt/3pVaIvi
