Osisko Mining Corp (C-OSK) - In the News

FP says pros make short work of Osisko retail investors

2009-02-06 08:59 ET - In the News
Shares issued 166,472,945
OSK Close 2009-02-05 C$ 4.53

The Financial Post reports in its Friday edition that in a company that on the day Osisko Mining's shares hit a record high of $5.45, the company announced a bought deal financing of units at $4.55. The Post's Barry Critchley, writing in Off the Record, says Osisko made two announcements: the first for $220-million that could rise to $254-million, and the second for $350-million that could rise to $403-million. While any new equity issue would be expected to cause a drop in the underlying share price, Osisko's financing is a double-barrelled affair because of activities of the professional investors. The latter group undertakes a straightforward strategy. It shorts the stock -- which brings additional pressure on the price -- knowing that it can cover the short with the new unit. (In the two-week price run-up ahead of the deal, 1.8 million shares were shorted.) Here, the investor ends up with half a warrant with one full warrant entitling the holder to buy another share at $4.55 between now and the middle of November. On the day of the deal, the stock plunged to $4.50 on 20 times the normal volume. That fall essentially made the warrant free. There were no benefits for the non-professional investors