Q: Medical Facilities just completed a large Dutch Auction tender at 18$.Why is the stock trading now almost 3$ lower near 15$
5i Research Answer:
The stock had risen on news of the offer, and while it is positive in reducing the number of shares, not all tendered shares were likely bought, so there would have been some disappointed shareholders. Also, of course, the company has $60M less cash now (more debt). But such a decline is fairly common after a Dutch Auction. Of course, the market is hardly co-operating, either. But we would deem the auction to be a success overall.