MG Holdings/SIP™ - Corporate Advisory
Intelligent Equity Finance™ for Undervalued Corporations
Cash xPRTs - Improve Equity Offerings
Get Tomorrow's Price Today™
Are you a director, CEO, CFO or Treasurer preparing for an IPO or follow-on equity offering? Worried that pricing will be well below full value and fees too high? A Cash xPRT offering addresses those problems and more.
Business is great. Time to go public. The underwriters say the price will be $10...
Underwriters say the public expects your stock to hit $15 within 3 years (or much sooner). You believe it will hit $25. The underwriters promise to communicate your story, but, given the risks, caution that $10 is a realistic offering price. Net of fees and offering expenses, you are told to "look forward" to receipt of net proceeds of little more than $9 per share.
Tomorrow's Price Today...
In a Cash xPRT offering, tomorrow's price today (or close to it) is what a firm receives for issuing equity if the firm's stock price subsequently hits a self-selected price target. In this example, that means receipt of nearly $25 per share instead of little more than $9. Payment is in part up front with the balance upon achieving the target.
A Cash xPRT is the same instrument as is used in a Cashless Buyback. When employed for IPOs and follow-ons, a Cash xPRT offering can deliver a far higher net price and far higher net proceeds with lower fees than realized through a standard issuance of common shares. Though not a riskless transaction like a Cashless Buyback and potentially subject to more complex accounting, the reward is exceptionally high compared to a traditional stock offering. For a substantially undervalued company in need of cash for a stronger balance sheet or to fund growth, a Cash xPRT offering makes far better economic sense than a traditional equity offering.
Better Investor Base
A Cash xPRT offering's key purpose is to substantially improve pricing on an equity offering, but it also attracts a broader investor base. For instance, for a high growth, high volatility technology company, a Cash xPRT offering can be expected to attract a new group of value investors.
A Cash xPRT offering creates constructive arbitrage. That means substantial liquidity (trading volume) especially for companies with market capitalizations under $1 billion (microcap, nanocap, and venture phase public companies). Any company whose daily trading volume is below 2% of outstanding shares will likely enjoy the substantial, secondary benefit of improved liquidity following a Cash xPRT offering.
We Partner with Your Banking Partners
We can architect and execute our sophisticated, elegant transactions unassisted. Nonetheless, your bankers have earned your confidence. We are ready to serve as their advisors if we serve you best by serving them.
Cash xPRT Offerings
A Stock Offering Alternative
Tomorrow's Price Today
No Debt, No Interest
Math, Not Magic™
MG Holdings/SIP, Summit, NJ 07901 tel. 908 264-2545