So just to recap, and please anyone correct anything wrong here:
Company starts making good money
Gets credit line from Danish bank
Danish bank pulls out at the worst time as credit has been used for investments.
Company dilutes shares and new investors take a significant vote power share
CEO “leaves”
Does that feel like a hostile takeover by means of intermediary? Not that I mind as long as the company makes profits and is not evil, I just don’t understand the why behind some events.
Two more questions: what is averaging down, buy shares that are lower than what you bought when expecting the price to go back up? And I saw there was a vote. Are the shares we buy non voting? If they are, how would we vote?
While these events might seem like elements of a hostile takeover, they could also just reflect the company’s response to an unexpected financial hardship and an attempt to steer the company back into profitability and stability.
A hostile takeover generally involves an entity or investor acquiring a substantial portion of a company’s shares against the wishes of the company’s management and board. This could be done by buying shares on the open market or offering a premium to existing shareholders in a tender offer. The new investors in your scenario do gain significant voting power, but if they acquired their shares via a dilution approved by the existing shareholders and the board, it’s not strictly a hostile takeover.
That said, it is possible that the new investors used the opportunity created by the financial distress to increase their influence over the company, which might feel “hostile” to the previous leadership, particularly if it led to the departure of the CEO.
The “why” behind these events could be numerous – financial stress, strategic disagreements, power struggles, or even personal conflicts. Without more specific information about the company, its financial situation, and the individuals involved, it’s hard to say definitively.
Averaging Down: This is a strategy where you buy more of a stock as its price drops, reducing your average purchase price. This is done in the expectation of a price rebound, but it carries risks if the price continues to fall.
Voting Rights: Typically, stock shares come with voting rights, allowing shareholders to vote on certain company decisions. Voting can be done in person, online, or by proxy. Details are usually provided by the company or your broker. Some stocks may not carry voting rights, so it’s essential to check the specifics with the company.
There may be political stability on the horizon for the region. The appointment of Raymond Ndong Sima as interim prime minister signals a potential period of stability and transition for Gabon. His proactive approach, suggesting a possible election in the coming two years, is a hopeful sign for a nation that has seen a single family’s rule for over half a century.
Mr. Sima’s insightful comment on taking “a little bit of what you can get” in politics suggests a pragmatic approach rather than fighting it out. This could translate to a more business-friendly environment, particularly for companies with a long-standing presence in Gabon like Woodbois.
I’d say the investment seems cautiously optimistic and fruitful into the future. Don’t forget Gabon also wants to trade 2 billion in carbon credits by 2027. The all time low price of WBI seems a tempting longer term investment I’ll be sticking with.
