I sold out mostly in the $3.40-50's and the last at $2.68. I was looking at getting back in this week until this happened. On the surface most of the business appears to be doing well. In hind sight the acquisition is not as good as it appeared. The last reserve strengthening was all there was going to be from my understanding but now there's another. I don't know if you now consider the possibility of another, but I would think if that occurred it would be substantially smaller.
In terms of the capital raising they shouldn't pay a dividend as they would be collecting $1 from you and then giving you back a $1 to pay tax on and leave you with maybe $0.6-70.
I went back and listened to the last investor call and they stated that if interest rates increased then some would be reversed but $100M is staggering to say the least. They need to have another investor call to explain how this occurred and how this won't happen again.
I don't know about selling but it certainly is illiquid on the AU side so there will be almost no opportunity to easily trade out if many are looking to do so. I will probably wait a little while and see how this plays out before investing. The hardest part is how you can value the business now that the goal posts keep moving. Hopefully for existing shareholders this won't be too dilutive.
CBL Price at posting:
$2.82 Sentiment: None Disclosure: Not Held
