[Guest joshchang]

But CB was much more than 24m. Are you guys thinking that they wanted to raise 100-200m in multiple steps to spread buys to "average up" in an assumed PPS up trend like Jinko did and under this assumption JASO management thought that only way (or best chance) they would be able to sell 100-200m of equity in steps averaging up was through this warrant exercise deal instead of multiple separate offerings like Jinko?

But why do you want to scare the investors away by throwing out a big dilution plan when they didn't need cash urgently? The dilution plan suppressed share price in my opinion. Anyway, I think it was a bad move by the management and maybe we just need to accept it and look forward instead of trying to find hidden benefit of the deal.

[sunnysky 905]

I don't see any hidden benefit of the deal other than those restrictions noted by abc and explo.

[explo 648]

But why do you want to scare the investors away by throwing out a big dilution plan when they didn't need cash urgently? The dilution plan suppressed share price in my opinion. Anyway, I think it was a bad move by the management and maybe we just need to accept it and look forward instead of trying to find hidden benefit of the deal.

This was the immediate effect of deal on Q3 results:

Cash: +21m net proceeds

Equity: -30m (+21m cash - 51m warrant liability)

When you have 400m in cash after paying back CB do you take a 30m loss to release 21m cash? Makes no sense to me. There must have been some other benefit. Structuring their debt for long-term strength has been going on for two years,. It's all clean and fresh and the 21m did not make a significant dent compared to all other action (like Hefei debt reclassification and other new LT debt won together with parent etc.).

[explo 648]

I don't see any hidden benefit of the deal other than those restrictions noted by abc and explo.

But do you think they where desperate to get those 21m cash from net proceeds and therefore accepted a bad deal?

I find that hard to believe.

[Guest joshchang]

But do you think they where desperate to get those 21m cash from net proceeds and therefore accepted a bad deal?

I find that hard to believe.

To be honest, I really don't like the way they complicated things. The warrant liability itself can go down in value when time pass by or share price goes down in this case company can record a gain. But if the share price goes up then they might record a loss. I don't think WS likes this kind of uncertainties. Not to mention they can write call options to take the value out of the warrant. In case of earlier expiration of call option written than the expiration of warrant, then they have the incentives of keep share prices down below the warrant exercise price. I am not really into these kind of share price manipulation conspiracy but that did add possible uncertainties.

[explo 648]

To be honest, I really don't like the way they complicated things. The warrant liability itself can go down in value when time pass by or share price goes down in this case company can record a gain. But if the share price goes up then they might record a loss. I don't think WS likes this kind of uncertainties

I agree. They complicated things without times being desperate for them in my view. That's why I want to make other sense than stupidity or corruptness of it. I hold it likely that there was a valid shareholder value of complicating things like this and that I just don't understand what it is (that's why I brought it up here for help).

[sunnysky 905]

But do you think they where desperate to get those 21m cash from net proceeds and therefore accepted a bad deal?

 

They are getting $207 M if all are exercised. Personally, I don't see much point to further discuss this. It's a bad deal and they did it for whatever the reason. Fluctuation of warrants value in the future does not impact their operational performance, even though it impacts GAAP EPS. I'm ready to look forward

[sunnysky 905]

explo, sent you a PM.

[Guest abcdefgjoho]

íf this investor exercises all 20 million then this is definitely a bad deal in my eyes. if this investor doesnt trade jaso stock around all we look at is a 10% dillution so not much problem at all. if they dont trade they can exercise 4 million shars thats it.

 

for me it is as simple as that. it all depends on the investor now. for sure they can get 200 mill equity but price was too low. the investor will of course have a tough time trading around if they continuelessly exercise and sell again - this will depress share price.

 

as i stated before q4 and q1 is the time where jaso need to show how they get profitable in a continous way. if they continue to underperform I will be gone.

remember - some companies are potentially great companies but not always for shareholders. yge is a good example .they might stay volume leader for some time but i doubt as a shareholder you will benefit. yge is still the favorite module supplier in germany for various reasons - brand, quality and so on. but for shareholders you get debt and potentially alot of dillution going forward.

 

we have to see how this works out for jaso. if these guys exercise full we discuss a 60 mil share company and not a 44 million share company which is quite a significant difference without enabling them todo much more in the solar market then they could have done before - with their good BS. time will tell soon.

[explo 648]

They might get 207m or just 24m. If they get more than 24m the rest will be delayed, same as a second offering and it's because stock price is higher than exercise price which would make second offering a good alternative. Ok, let's accept stupidity or corruptness, but good bargain now in hope of not repeating that stupidity or corruptness. Damn it.