Originally Posted by
SailorRob
Ok this will go so far over the heads of idiot posters on this thread who are scaremongering about a CR that we might run short on stratosphere.
OCA don't not need to do a CR.
But that doesn't mean they shouldn't.
I now hope that OCA do a capital raise with the proviso that I can participate pro rata and that they can generate a decent return on the capital.
The price at which they do it is totally irrelevant to me.
If I want more ownership of the company I can simply buy shares off an idiot, but this just means I am buying a share of the existing capital within the company.
Conversely I can via a CR keep the same ownership proportion of the company but own a larger amount of capital within it which should generate superior returns.
Now if they have opportunities that can generate good returns due to the downturn (buy more development land or whatever) then they should do it.
Ultimately it gives me more avenues to deploy capital, if they raise capital at over intrinsic I can sit it out and benefit from the new capital. If they raise at under then I participate pro rata and it gives them a greater capital base on which to generate returns.
If they do a CR to keep the lights on then while not ideal, if they are doing that using retained earnings that's my capital anyway.
Think through these scenarios as if you owned a private business with one other person. No matter what you each value the business at, if you increase your investment in it by 10% in the same proportion then you both own the same company in the same proportion, that company now has more capital, that's the only difference.
So the critical thing for me is can they generate a return on that capital that I'm happy with, and perhaps the opportunities to do so at the moment are great.
Bring on the capital raise. We should all be keen.