BBI - Babcock & Brown Infrastructure

joe7068 · 7 September 2009

I don't see why they have to ask the BEPPA and SPARCS holders anything.

If I were this pathetic and dishonest management and wanted to get the deal done to save my own skin i would get approval from the present shareholders and then move to covert the hybrids.

persistentone · 7 September 2009

joe7068 said:
I don't see why they have to ask the BEPPA and SPARCS holders anything.

If I were this pathetic and dishonest management and wanted to get the deal done to save my own skin i would get approval from the present shareholders and then move to covert the hybrids.

They might be able to convert on the normal EPS formula without permission, but I doubt they could change the conversion ratio without permission.

joe7068 · 7 September 2009

They can't.

furthermore I can't really see how they can screw over the BEEPA holders in a very big way without the unit holders walking away and letting it fall.

see here: (approx numbers)

current unit holdings 2.7 billion

let's say we use a unit price of 3.5 cents.

This means the conversion rate would be 1/.035 = 28.5714

There are approx. 840 hydrids around including SPARCS.

say the cornerstone invests 1.5 billion at .02 cents

This is what happens:

2.7 billion + 840* 28.57+ 75 billion = 106.27 billion as the total issue after dilution.

If the units after dilution trade at 2 cents what happens to the Hybrids?

Say you had 500,000 BEEPA's prior to dilution after dilution they become

14,285,000 which at 2 cents = $285,700.

Frankly I can't see anyway out for them to screw BEEPA.

jacobkball · 7 September 2009

I, for one, cannot believe how much of a ride we're being taken for.

I'm amazed that so soon after a reasonably positive announcement, which pushed the shares up to nearly 20c, we have a negative announcement, which has halved that (and more).

It's been great for those who have picked these highs and lows so consistently throughout the whole process. Uncanny, even.

Based on these very strategic announcements, who's a winner? Management? Could they perhaps be selling high after the first announcement, then snapping them all back up, plus more, after the second, when everyone's panicking? Great way to reduce the debt owing on BEPPA.

Here's my take. After a further fall in prices, we'll get another announcement. Lo and behold, a potential buyer for DBCT has come forward! Negotiations in progress! Won't that just change the game and make things interesting

Let's see where we go today!

jono1887 · 7 September 2009

jacobkball said:
I, for one, cannot believe how much of a ride we're being taken for.

I'm amazed that so soon after a reasonably positive announcement, which pushed the shares up to nearly 20c, we have a negative announcement, which has halved that (and more).

It's been great for those who have picked these highs and lows so consistently throughout the whole process. Uncanny, even.

Based on these very strategic announcements, who's a winner? Management? Could they perhaps be selling high after the first announcement, then snapping them all back up, plus more, after the second, when everyone's panicking? Great way to reduce the debt owing on BEPPA.

Here's my take. After a further fall in prices, we'll get another announcement. Lo and behold, a potential buyer for DBCT has come forward! Negotiations in progress! Won't that just change the game and make things interesting

Let's see where we go today!

lets hope so... atm the moment it looks like its just going down down and down

Mitsimonsta · 7 September 2009

I sold out of my BEPPA (8.4c Avg) for 11.6c on Friday afternoon.

Had I waited until today, I would have been in loss territory. Preservation of capital is very important to me.

Absolutely kicking myself for not selling after the results announcement.

tracytop · 7 September 2009

Luckily , sold all my Beppa at 0.12 on fri.
Wont touch this share until everything is clear, either the deal lapsed or every existing s/h get diluted.

IMO, this deal will not get through. anyway, either results are negative.

Largesse · 7 September 2009

LOL!

I wonder how many people would've been saying "glad i topped up on BEPPA on friday afternoon" if the shares had rallied 25% instead of falling today....

people calling their buys and sells after the fact are so bloody pathetic.

persistentone · 7 September 2009

joe7068 said:
They can't.

furthermore I can't really see how they can screw over the BEEPA holders in a very big way without the unit holders walking away and letting it fall.

see here: (approx numbers)

current unit holdings 2.7 billion

let's say we use a unit price of 3.5 cents.

This means the conversion rate would be 1/.035 = 28.5714

There are approx. 840 hydrids around including SPARCS.

say the cornerstone invests 1.5 billion at .02 cents

This is what happens:

2.7 billion + 840* 28.57+ 75 billion = 106.27 billion as the total issue after dilution.

If the units after dilution trade at 2 cents what happens to the Hybrids?

Say you had 500,000 BEEPA's prior to dilution after dilution they become

14,285,000 which at 2 cents = $285,700.

Frankly I can't see anyway out for them to screw BEEPA.

joe7068, if they convert the hybrids like BEPPA the way they are supposed to convert the BBI shares are worthless. Will any BBI holder vote for the deal if there is nothing in it for them?

So pick your poison: either the BBI common or the BEPPA are going to be extremely pissed off campers, and it's going to be hard to get acceptance of the deal.

Largesse · 7 September 2009

and anyway, surely you guys can still see that 'huge value' in BBI regardless of the markets swings?

surely this is just another great opportunity to 'top up'?

buh bow.

tracytop · 7 September 2009

Largesse said:
and anyway, surely you guys can still see that 'huge value' in BBI regardless of the markets swings?

surely this is just another great opportunity to 'top up'?

buh bow.

I would only say, the huge value for potential conerstone investor, not existing s/h. Existing S/H will be wiped out if the deal pass through. If the deal failed, what is the impact? I think it is clear

Largesse · 7 September 2009

i'm so glad i shorted 20m units of BBI on friday.

such an astute and well considered move in hindsight.

persistentone · 7 September 2009

Largesse said:
i'm so glad i shorted 20m units of BBI on friday.

such an astute and well considered move in hindsight.

From my point of view you have to announce the trade as you do it (as BB usually does) if you want to get credibility for the trade.

It's too easy for people to make claims after the stock has moved. Oh, wait just saw your other posts. Okay, joke. I get it now.

learning101 · 7 September 2009

I bought 53k of BBI @ 4.7 cents. Hopefully this stock will recover. Or I am a total ass.

LOL

101

Largesse · 7 September 2009

i'm going to change my account name to HindsightMillionaire.

would fit in really well around these parts

jacobkball · 7 September 2009

Mitsimonsta said:
Absolutely kicking myself for not selling after the results announcement.

Well, aren't we all.... oh, except those who DID sell out at the top. Yes, it's 20/20 in hindsight. I held on to mine, reasonably confident after the 'upbeat' announcement that things had settled for the moment. I'm sure many others felt the same way too.

It just shows how quickly (and brutally) sentiment can change with these types of stocks. It's all part of the learning process for me, and believe me, I'm learning

The way things can change with these guys, I'm holding on to mine.

4fundamentals · 7 September 2009

Question:-

I don't know.... but I am kinda thinking,

Wasn't the actual BBI security always a "speculation" play. I just find it hard to believe now, sure the price has dropped, but everyone knew that in FY11, corporate debt faciliites of around $585M would come due?

I'm not sure. If i'm being really stupid. But I think markets overreact to any negative and positive news.

I think $0.044 is too low....that is essentially a drop of 28% from $.061 close.

Hmm. Do you think that this news created 28% decrease in the long term potential of the company?

I just don't know if i'm game enough to put my money where my mouth is.

ironmonkey1 · 7 September 2009

Supposedly the deal gets through; does the market price in all or most of the dilution when its announced; or there will also be a sharp drop on the actual date of share issue?

4fundamentals · 7 September 2009

Ironmonkey:

Very good points. I guess i'm just thinking long term value.

I'm still in at an entry price of $.051, I have a long term buy and hold type strategy...however i was kicking myself I didn't sell at $.10 (as i'm sure many are).

I think your points are valid, that there may be some lower entry prices along the way.... I guess i'll sit and hold.

hardyakka · 7 September 2009

Well I'm out, the risk reward equation does not stack up for me any longer. I've seen an unrealised profit of over $200k turn into a realised profit of just over $30k.

I've tried to rationalise the outcomes logically, but now I simply do not trust what the BBI board is telling us. When I first read the announcement last Friday I let logical thought prevail over instinct and held, an expensive mistake but then thats life.

Good luck to holders and I may re-enter if the risk reward equation changes.

Cheers

BBI - Babcock & Brown Infrastructure

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