Q: So what should happen to the stock price after the bought deal? Will it slowly recover? Is there anything material that investors should be concerned with? The last earnings period was, I thought, quite solid.
5i Research Answer:
We can't really predict prices with any granularity, but in a typical bought deal the stock declines as investors adjust positions and then the stock typically recovers, depending on fundamentals and results (which were fine). In this case, no new shares were issued and really nothing changes at the company, except its largest shareholder sold a partial position of its holdings. Considering WSP's one-year gain of 20%, the Caisse's dollar exposure hasn't changed much even with its sale.