I'm really looking for some signs that they are going to spend this money constructively.
The last round, Arena gave us about $11mil (CN + options conversion) which we burned through with minimal transparency and seemingly didn't achieve a great deal. Perhaps they spent it 'like drunken sailors' (as Davisite puts it) thinking they were going to make a lot more at the auction?
Before the first CN was announced, I was expecting them to seek 4 to 5 million to get them through to the auction. I feel the loan of $8.5mil (plus options) was a lot more than they needed, but as others suggested it was enough to keep us going if the auction didn't go to plan.. in hindsight, the skeptic in me wonders if it may have been overdone for Arena's sake. Arena certainly did well out of it, making somewhere in the vicinity of $20mil profit from the deal, while we didn't end up having much left to keep us afloat after the auction failure.
This time round the loan is twice the size, so it does make me nervous. While Arena will obviously make money again, hopefully there will be some real value added for shareholders too this time.
MUS Price at posting:
3.0¢ Sentiment: None Disclosure: Held
