Latest news with #dilution
Globe and Mail
04-07-2025
- Business
- Globe and Mail
Why AeroVironment Stock Plunged This Week
Key Points Dilution fears were raised on news of twin capital-raising moves. The company is floating both fresh stock and convertible senior notes in a public offering. Military drone specialist AeroVironment (NASDAQ: AVAV) has generally done well as a stock lately. But that didn't happen this week, as news of a round of capital-raising dampened investor sentiment on the company. According to data compiled by S&P Global Market Intelligence, AeroVironment stock lost more than 11% of its value over the period. New shares and convertible notes On Monday, AeroVironment announced it would float both a secondary share offering and an issue of convertible senior notes. The following day it set the parameters for the pair. With the former, it's selling just over 3.5 million shares of its common stock in an underwritten public offering at $248 per share. The underwriters of the flotation have been granted a 30-day option to collectively purchase an additional 29,234 shares. As for the convertible senior notes, AeroVironment is issuing $650 million aggregate principal amount at an interest rate of 0%. They are to be convertible at the investor's option under certain conditions and at certain periods. The initial conversion rate is slightly over 3.1 shares per $1,000 principal amount of the notes; the company said this equates to $322.40 per share. AeroVironment said it expected both issues to close on Thursday, July 3, and to net proceeds of around $1.47 billion. The company aims to use a bit more than $965 million to retire debt, with the remainder being directed to "general corporate purposes." These include an increase in manufacturing capacity. Dilution fears Currently, AeroVironment has just under 45.6 million shares outstanding, so if conversion rates are high with the notes, the twin issues could be dilutive. Shareholder dilution is the bane of many of an investor, so it's likely this was the root of their discontent during the week. On a fundamental basis, though, AeroVironment still looks like a good stock to own. The company seems to be doing well satisfying the growing demand for combat drones, as witnessed by its impressive fourth-quarter performance and its growing backlog. I wouldn't be down on the stock only because of its latest capital-raising moves. Should you invest $1,000 in AeroVironment right now? Before you buy stock in AeroVironment, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and AeroVironment wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $699,558!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $976,677!* Now, it's worth noting Stock Advisor 's total average return is1,060% — a market-crushing outperformance compared to180%for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of June 30, 2025
Globe and Mail
23-06-2025
- Business
- Globe and Mail
Why Super Micro Stock Is Sinking Today
Shares of Super Micro Computer (NASDAQ: SMCI) are falling on Monday, down 8.5% as of 3:30 p.m. ET. The jump comes as the S&P 500 (SNPINDEX: ^GSPC) and Nasdaq Composite (NASDAQINDEX: ^IXIC) were both up 0.8%. Super Micro announced a new debt offering that sparked concerns of dilution. The sell-off made it the worst-performing stock in the S&P 500 today. Super Micro to raise $2 billion Super Micro announced it is raising $2 billion through a convertible note offering that matures in 2030. Only qualified institutional buyers can take part in the offering. The company plans to use the funds for "general corporate purposes, including to fund working capital for growth and business expansion." The move sparked fears of dilution, which usually follows a convertible note offering like this. In order to combat the dilution, the company will use $200 million to enter into capped call transactions. The move is commonly used to soften dilution, but investors clearly did not feel it would be enough. Super Micro has rebounded The company has seen its share of controversy, narrowly avoiding a Nasdaq delisting just months ago by refiling financials, replacing its CFO, and adding board members. It was the subject of a damning short report detailing financial irregularities and questionable business practices. Despite this, the company's stock has largely recovered as artificial intelligence (AI) giant Nvidia continues to rely heavily on the company, apparently unfazed by the allegations. Despite the implicit blessing of Nvidia's continued partnership, the track record of financial misconduct makes me nervous, and I would avoid the stock. Should you invest $1,000 in Super Micro Computer right now? Before you buy stock in Super Micro Computer, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Super Micro Computer wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $664,089!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $881,731!* Now, it's worth noting Stock Advisor 's total average return is994% — a market-crushing outperformance compared to172%for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of June 23, 2025
Irish Times
08-06-2025
- General
- Irish Times
Should I add water to my wine? Perhaps just a teaspoon
Adding water to wine does not always go down well with the purists, but it has been done for centuries, as far back as Ancient Greece and Rome. Not only is it acceptable, but in some cases, adding a drop or two of water can actually improve your wine. Wine is about 85 per cent water. The rest is alcohol, but also small amounts of acid, phenolics and minerals that add the all-important flavours that make wine taste so nice. You may already be drinking diluted wine, as spritzers and wine coolers are simply a mix of sparkling water and wine, sometimes with other fruit flavours added. On a hot sunny day, adding a little sparkling water or a few cubes of ice can make it so much more refreshing. In Ancient Rome and Greece, wine was usually watered down to avoid drunkenness, while also making the water safe to drink. The Greeks, apparently, added seawater – not something I've ever tried but it doesn't sound great. They also flavoured wine with herbs, spices and honey, probably to make old, oxidised wine more palatable. At home, I tend to avoid the big, powerful alcoholic reds, partly because I don't want to ingest too much alcohol, but often because I don't like the flavours. My job obliges me to taste them, but not necessarily to drink them. Over the last few decades, wine has become more alcoholic. For instance, most Bordeaux was once 12.5-13 per cent. These days, it is more likely to be 14-14.5 per cent and even 15 per cent sometimes. Full-bodied red wines can be very extracted and overwhelm the senses rather than refresh the palate. A while ago, I began adding a teaspoonful or two of water to my glass of big red and found that it transformed the wine. It became much more aromatic and fruitier, turning those jammy prunes and sweet dark cassis into fresh blackcurrants and summer fruits. According to food writer and scientist Harold McGee, alcohol binds to flavour compounds in a wine, masking the flavours a little, and adding water helps release those flavours. READ MORE Now I am not suggesting that you start adding large quantities of water to your finest wines. Adding water also seems to change the tannic structure of a wine and can make it taste a little dry and hollow, so I never add too much, usually a teaspoon or two, and I do not add it to my best bottles. However, on a warm sunny day a few cubes of ice in a fruity white wine will make all the difference. It is one thing to add water to wine; but so far I have failed to turn my water into wine.
Yahoo
24-05-2025
- Business
- Yahoo
Earnings Troubles May Signal Larger Issues for Collins Property Group (JSE:CPP) Shareholders
Last week's earnings announcement from Collins Property Group Limited (JSE:CPP) was disappointing to investors, with a sluggish profit figure. We did some further digging and think they have a few more reasons to be concerned beyond the statutory profit. This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality. To understand the value of a company's earnings growth, it is imperative to consider any dilution of shareholders' interests. In fact, Collins Property Group increased the number of shares on issue by 28% over the last twelve months by issuing new shares. Therefore, each share now receives a smaller portion of profit. To talk about net income, without noticing earnings per share, is to be distracted by the big numbers while ignoring the smaller numbers that talk to per share value. Check out Collins Property Group's historical EPS growth by clicking on this link. As you can see above, Collins Property Group has been growing its net income over the last few years, with an annualized gain of 66% over three years. But EPS was only up 29% per year, in the exact same period. Net profit actually dropped by 51% in the last year. Unfortunately for shareholders, though, the earnings per share result was even worse, declining 60%. And so, you can see quite clearly that dilution is having a rather significant impact on shareholders. If Collins Property Group's EPS can grow over time then that drastically improves the chances of the share price moving in the same direction. But on the other hand, we'd be far less excited to learn profit (but not EPS) was improving. For the ordinary retail shareholder, EPS is a great measure to check your hypothetical "share" of the company's profit. Note: we always recommend investors check balance sheet strength. Click here to be taken to our balance sheet analysis of Collins Property Group. Finally, we should also consider the fact that unusual items boosted Collins Property Group's net profit by R208m over the last year. While it's always nice to have higher profit, a large contribution from unusual items sometimes dampens our enthusiasm. We ran the numbers on most publicly listed companies worldwide, and it's very common for unusual items to be once-off in nature. And, after all, that's exactly what the accounting terminology implies. Assuming those unusual items don't show up again in the current year, we'd thus expect profit to be weaker next year (in the absence of business growth, that is). In its last report Collins Property Group benefitted from unusual items which boosted its profit, which could make the profit seem better than it really is on a sustainable basis. And furthermore, it went and issued plenty of new shares, ensuring that each shareholder (who did not tip more money in) now owns a smaller proportion of the company. For the reasons mentioned above, we think that a perfunctory glance at Collins Property Group's statutory profits might make it look better than it really is on an underlying level. Keep in mind, when it comes to analysing a stock it's worth noting the risks involved. When we did our research, we found 5 warning signs for Collins Property Group (1 doesn't sit too well with us!) that we believe deserve your full attention. Our examination of Collins Property Group has focussed on certain factors that can make its earnings look better than they are. And, on that basis, we are somewhat skeptical. But there is always more to discover if you are capable of focussing your mind on minutiae. Some people consider a high return on equity to be a good sign of a quality business. So you may wish to see this free collection of companies boasting high return on equity, or this list of stocks with high insider ownership. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Yahoo
17-05-2025
- Business
- Yahoo
Weak Statutory Earnings May Not Tell The Whole Story For InPlay Oil (TSE:IPO)
Despite InPlay Oil Corp.'s (TSE:IPO) recent earnings report having lackluster headline numbers, the market responded positively. We think that shareholders might be missing some concerning factors that our analysis found. Our free stock report includes 4 warning signs investors should be aware of before investing in InPlay Oil. Read for free now. In order to understand the potential for per share returns, it is essential to consider how much a company is diluting shareholders. In fact, InPlay Oil increased the number of shares on issue by 86% over the last twelve months by issuing new shares. That means its earnings are split among a greater number of shares. To celebrate net income while ignoring dilution is like rejoicing because you have a single slice of a larger pizza, but ignoring the fact that the pizza is now cut into many more slices. You can see a chart of InPlay Oil's EPS by clicking here. Unfortunately, InPlay Oil's profit is down 97% per year over three years. Even looking at the last year, profit was still down 80%. Sadly, earnings per share fell further, down a full 81% in that time. And so, you can see quite clearly that dilution is having a rather significant impact on shareholders. If InPlay Oil's EPS can grow over time then that drastically improves the chances of the share price moving in the same direction. But on the other hand, we'd be far less excited to learn profit (but not EPS) was improving. For the ordinary retail shareholder, EPS is a great measure to check your hypothetical "share" of the company's profit. That might leave you wondering what analysts are forecasting in terms of future profitability. Luckily, you can click here to see an interactive graph depicting future profitability, based on their estimates. InPlay Oil issued shares during the year, and that means its EPS performance lags its net income growth. As a result, we think it may well be the case that InPlay Oil's underlying earnings power is lower than its statutory profit. In further bad news, its earnings per share decreased in the last year. At the end of the day, it's essential to consider more than just the factors above, if you want to understand the company properly. If you'd like to know more about InPlay Oil as a business, it's important to be aware of any risks it's facing. To help with this, we've discovered 4 warning signs (2 can't be ignored!) that you ought to be aware of before buying any shares in InPlay Oil. This note has only looked at a single factor that sheds light on the nature of InPlay Oil's profit. But there is always more to discover if you are capable of focussing your mind on minutiae. Some people consider a high return on equity to be a good sign of a quality business. While it might take a little research on your behalf, you may find this free collection of companies boasting high return on equity, or this list of stocks with significant insider holdings to be useful. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Sign in to access your portfolio
