CPE Share offering today 9.8.14

[wilmawatts]

Looks like CPE will sell off on the new share offering.

What is your take Dan?

Sit and watch for awhile, buy, move on?

Just curious. Stock slumped last week near week end also, surprising after the acquisition announcement

[setliff]

I couldn't find price for offering, but looking at trades it must be around 9.50.

[setliff]

12m shs is a hell of a dilution with only a 39m sh float.

[dan_s]

First let me say that this is very good news for those of you that own the pfd stock. Remember the pfd stock is behind debt and ahead of the common stock. They call it "preferred" for a reason.

Having access to capital markets is critical for small-caps. Maintaining a strong balance sheet is also very important. Using some equity to grow the asset base is fine with me.

Lowering debt will also lower interest expense, so this offering will not have a big impact on my valuation.

If CPE hits the production forecast used in my model for Q3 and Q4, the valuation will be going up.

[wilmawatts]

Lots of shares but also explosive growth in production. On a per share basis still the pro forma should look pretty darn good.

In a way equity is less risky than leverage, depending on the extent.

Looks like we have found a post offering notice bottom, more or less

[wilmawatts]

Not bad, we have found the bottom, things will look up from here:

7:31 AM EDT, 09/10/2014 (MT Newswires) -- Callon Petroleum(CPE) shares edged slightly higher before the market open after pricing the sale of 12.5 million shares at $9 each, equivalent to a 1.6% discount to Tuesday's closing price.