Pitts, I note that you didn't actually answer my 2 questions.
Sorry I saw these as statements which previously I thought I'd tried to point you in a direction but again to try and help...
1. According to your logic, CHC is worth $40m. Let me ask you, if you took that offer to the people who own it do you think they would say yes and sell to you? I propose that they would say no and therefore the value of the company is higher. The value of the available shares is what the market says but nothing more.
That is absolutely how it works. Market capitalisation = number of shares x the share price...
I don't know how else to explain it really. Ultimately a share is what? Its a claim on future cash flows of the entity in question and so whilst you may think it (CHC) should be worth more, or First Reserve may like to wish it was worth more.... the market is telling you it isn't.
Here is a list that you will be able to see for the major holders of CHC:-
CHC Group Ltd. (HELI) Ownership Summary - NASDAQ.com
So the share you see quoted and could buy at 42cents is the very same thing as held by First Reserve (the major holder of common stock). The same. i.e. if your share is worth 42cents... so is every single one of their individual shares.
The CD&R holding that you keep mentioning is in convertible preferred shares, which is different to common equity. These instruments are a debt instrument that give the holder (in this case CD&R) a coupon (i.e. something that gives a % return - like a bond) and the opportunity for CD&R to convert these into common equity (yes the same as we have been talking about above and is trading at 42cents...)... giving the holder the option to benefit from a higher stock price... Hmmm not today anyway. Plus they have the added kicker that as preferred shares the common stock holders are subordinate to these in the event of any default.. Which brings us nicely onto a point in your question No.2....
By no means is CHC out of the woods but $50m? Please... They own ac worth more than that alone (just about).
So immediately your $50m of helicopters are going.... yes... CD&R... they take first dibs.
Err come on NWS when you say..
2. The fact that people are still buying (needs 2 sides to trade, buyer and seller) shares when people sell them indicates that plenty of people out there think there is upside. The stock is down 95% ish in 18 months when the fundamentals are actually better then they were when CHC floated. Do any of you think for the notional $40m, CHC is over priced, underpriced or fair value?
The market is pricing 42cents. That was where the stock closed in the auction on Friday.. i.e. the price where buyers and sellers met.. It doesn't matter what I think, you think, DB thinks, the workers grafting hard everyday think. The people who OWN, want to OWN it or do not want to OWN it think this is fair value.
So do you get it now? Because this:-
Professional investors (of the buy and hold brigade) bought a huge chunk of the remaining 25% (ish) that CD&R didn't buy and now the available shares for joe public for private investment is a fraction of the total number of shares.
suggests you don't understand the structure and therefore when you say you have spent the grand sum of $840 on 2000 shares you are not clear on what that is....
we can revisit this conversation in 2 years time.
Please do but you seem to mistake me trying to explain the reality of CHC stock and how it trades as me hoping / wishing or wanting CHC to fail. Thats not it. I do not I'm merely trying to point out the elements that you are clearly missing.
Good luck in your trade.
As for this:-
Forgive me if I'm wrong here but only a 1/4 of the company is traded on in the NYSE? CD&R only ever put up 25-26% of the company for trade.
So even if the shares dropped to $0.01, it's not going to end CHC like some on here would like to believe.
It's a company that is year on year bringing in $1.8bn worth of revenue.
What are you talking about?? Do you understand the difference between revenue and earnings for example? If you are willing to trade $100 bills for $10 you will generate a great deal of revenue..... You will not however have much to show by way of earnings.....
Fukk me its painful.
When a stock trades at 1cent what do you think that is telling you?