Let's be perfectly frank.
All stocks carry variable degrees of risk even the most chromatic of the blue chips.
We all appreciate the dark side castigations offered up by the negative set because it allows investors to rationalize their decision making process.
SCG is a speculative stock.
There are no guarantees.
I look at the revamped and reduced debt in a positive light.
If I was a participant in said debt, I would have been pushing for 8 cent warrants or even better, an 8 cent share conversion and a 10 cent warrant.
I certainly would not have agreed to warrants set at double the market price.
I'm sensing that insiders believe in the viability of the company and manifest this belief in real monetary terms.
Bear in mind, others put up $2 million while insiders put up $525,000.
Interestingly and perhaps even more noteworthy, the other debt participants accepted a .15 cent warrant.
The insiders did a great job in helping to package this debt because by no means was it a fleece job.
Prime plus 7 is a good coupon clip but it is not extraordinary.
Like I said, if I were a debt participant I would have squeezed for cheaper warrants or an attractive equity conversion clause.
This group of debt holders did not squeeze.
I'm liking this play that much more after this week's news.
A great weekend to all.