MIND

[dan_s]

4:02PM Mitcham Ind announces a common stock offering (MIND) 15.99 -0.52 : Mitcham intends to use the net proceeds from this offering to repay borrowings under its revolving credit facility, to purchase seismic lease pool equipment and for general corporate purposes. Global Hunter Securities is acting as sole book-running manager.

No details on the size of the offering.

I know Billy hates debt. I think this is a good sign that he has more growth. This stock needs more float.

[dan_s]

HUNSTVILLE, Texas, June 17, 2011 /PRNewswire/ -- Mitcham Industries, Inc. (NASDAQ:MIND - News) ("Mitcham" or the "Company") today announced that it has priced an underwritten public offering of 2,000,000 shares of its common stock at a price to the public of $14.50 per share, for gross proceeds of approximately $29.0 million. The net proceeds to Mitcham from this offering are expected to be approximately $27.1 million, after deducting underwriting discounts and commissions and other estimated offering expenses. Mitcham has granted the underwriters a 30-day option to purchase up to 300,000 shares of its common stock to cover over-allotments, if any. The offering is expected to close on or about June 22, 2011, subject to customary closing conditions.

Mitcham intends to use the net proceeds from this offering to repay borrowings under its revolving credit facility, to purchase seismic lease pool equipment and for general corporate purposes. Global Hunter Securities, LLC is acting as sole book-running manager, and Ladenburg Thalmann & Co. Inc. is acting as the co-manager in this offering.

So what does this do?
> Pays off all of Mitcham's debt
> Allows them to expand rapidly to meet growing demand in several of their markets

I don't have a problem with it but I sure wish Global Hunter would have priced it higher.

I will update my forecast model, assuming this deal closes next week. It will be on the website under the Sweet 16 tab later today.

[MBB]

I googled on Global Hunter. It seemed a little suspicious that MIND was run up and then dropped this much. Global Hunter must have known there was a stock offering coming, A good trick would be to run it up knowing it would drop on the offering.

The google on Global Hunter produced this at ZeroHedge which is very negative on Global Hunter.

http://www.zerohedge.com/article/it-tim ... mmendation

[MBB]

Global Hunter reiterated a buy on June 11. Raised target from 18 to 22.

http://finviz.com/quote.ashx?t=mind&ty=c&ta=1&p=d.

Global Hunter would have known about the stock offering as of June 11 for sure.

[dan_s]

Don't be too hard on Global Hunter. They are a good firm that covers a lot of small-cap energy firms. Their research is usually right on.

Pricing a share offer is difficult. It needs to be done at a price that will get the stock sold quickly. It has to be priced below market.

Actually, I like the transaction and think it will help MIND in the long run.
> It pays off all the debt
> Gives them more flexibility to add to the lease pool in the hot new markets
> Gets more stock out in the market so trading volume should go up. I'm sure a lot of funds shy away from MIND due to the low trading volume.

[ghrcap]

MIND is going into the Russell 3000 index end of the month. CXPO, HDY, FTK, also.
http://www.russell.com/indexes/tools-re ... hanges.asp