What do you mean not issuing new shares? They are basically doubling the number of shares on issue. Oh and this will trigger Frank's contract clause which gives him 5% of the company.
Since this rights issue is underwritten all of the shares not taken up by existing shareholders will flow back to the underwriter who will then dump them straight on the market at any price they can get (underwriters are not in the business of investing in companies).
While this does give AXP another 9 to 12 months runway (assuming that a large chunk of this money is not going to pay back the loan), unless they can actually get sales up very significantly then all this does is delay the inevitable. AXP has a sales problem that needs to be fixed ASAP.
AXP Price at posting:
9.9¢ Sentiment: None Disclosure: Not Held
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