I think you're misunderstanding how the capped calls work. Until the stock reaches $160 any dilution is offset by the fact that they have bought a call with a strike of $105 and sold a call with a strike of $160. If the stock is above $160 there will be dilution but they will have retired shares today at 50% of the price they will be issuing them for so it's still a good outcome. As an owner I agree with you I'd have preferred they not issue the dividend but this offering makes sense to me.
Thanks for the heads explanation @scoobydoodle. There are just so many avenues in my mind they can raise cash and this deal just ain’t that great and the size is doesn’t inspire confidence
The business performance over the last few years has clearly left a lot to be desired. Still, I trust Joe Tsai not to make a basic financial engineering mistake. I'd like to see them be more aggressive on the buybacks too but retiring 5% of the stock in 2023 isn't something to sniff at.
I think you're misunderstanding how the capped calls work.
Until the stock reaches $160 any dilution is offset by the fact that they have bought a call with a strike of $105 and sold a call with a strike of $160. If the stock is above $160 there will be dilution but they will have retired shares today at 50% of the price they will be issuing them for so it's still a good outcome.
As an owner I agree with you I'd have preferred they not issue the dividend but this offering makes sense to me.
Thanks for the heads explanation @scoobydoodle. There are just so many avenues in my mind they can raise cash and this deal just ain’t that great and the size is doesn’t inspire confidence
The business performance over the last few years has clearly left a lot to be desired. Still, I trust Joe Tsai not to make a basic financial engineering mistake.
I'd like to see them be more aggressive on the buybacks too but retiring 5% of the stock in 2023 isn't something to sniff at.
Agreed. It's smoke and mirrors and stupid. Just giving us another reason to be irritated with them.
Just when you think they are starting to do the right things too. I mean come on!