capital raising, page-3

New shares issues will have the effect of diluting the book value. That's the cons. But the pros is that the Co. will be able to wipe off a chunk of the debt to comply with covenant. This will have a very positive effect of silencing the endless chatter from those who, by stressing on the debt, wish for the sp to go down so they can profit at the bottom. So I see cap raising a big positive. If cap raising is being planned I think the completion of it will see the sp take off.

I don't see dilution of the book value as bad. My reasoning is this: I have noticed that generally sp is influenced primarily by earnings and not so much by book value - proof compare the P/B between WOW and WES. There will inevitably be an upturn in metals demand which leads to upturn in drilling demand which leads to increased earnings. Future earnings will in turn improve book value anyway.

So while some people try to instill fear and doubt about cap raising by pointing to book value dilution. To me, I'd say bring it on! Raise! By all means raise!