In Han Christian Andersen's tale of "The Emperor's New Clothes", the short tale by Andersen tells of two weavers who promise an emperor a new suit of clothes that is invisible to those who are unfit for their positions, stupid, or incompetent. When the Emperor parades before his subjects in his new clothes, no one dares to say that they don't see any suit of clothes until a child cries out, "But he isn't wearing anything at all!". (Source: Wikipedia)
Your company's stock price is under tremendous pressure due to adverse events happening from outside and within the company. You need to
Call for a deeply discounted rights issue and your share price will be bashed down further beyond recognition. No, No, this will not work.
So, why not think out of the box? Come up with a proposal so unthinkable that shareholders start to doubt themselves instead of the company? Let them think that it is them who do not understand the merits of a rights issue that is offered to them at a PREMIUM rather than a discount! Ok... to sweeten the deal, we'll offer them some free warrants which will given to them if they subscribe to the rights issue.
Meanwhile we'd better start pushing up the share price together with our buddies and interested parties so that it rises above the rights issue price. And make sure as hell that the share price stays that way until the rights issue is over so that minority shareholders will think that this is a good deal that they are getting themselves into.
Will this plan work? Maybe, maybe not. But we've got no choice, so we'll have to give it a try. Even if the rights issue is undersubscribed, we'll get some much-needed funds into our coffers.
Nothing ventured, nothing gained. "Forture favours the bold" - don't they say? Unless someone is
----------------------
Author's remarks: This is a fictitious story which was inspired by a dream that the author had in which he was the Financial Controller of a company.
No comments:
Post a Comment