Q: Hello again,
RSI has just closed their convertible debenture offering. Does this significantly improve growth potential and therefore investor attention? Is it now timely to invest, or, are there better alternatives?
Grazzia
RSI has just closed their convertible debenture offering. Does this significantly improve growth potential and therefore investor attention? Is it now timely to invest, or, are there better alternatives?
Grazzia
5i Research Answer:
Recent earnings were OK; Earnings were OK, and the decline seems more related to the convertible debenture issue the company announced. With a convertible, investors can sell their stock and replace it with the bond, and this often puts pressure on a company's shares. They can also short the stock against the convertible debenture. The stock is very cheap, but trades for income. There is minimal growth here, and in the past 10 years the stock is up only 2.9%. We would not say the convert gives it more growth potential. Overall we do not find RSI very interesting.