Originally Posted by
eponymous_coward
Well, that's how the VC funds and Virgin get out of holding the bag, isn't it, by transferring to stockholders post-IPO?
Should be fun... and I don't think I plan on buying any stock for a while, not when there are airlines out there that actually produce dividends...
Absolutely; the interesting part (for me) to watch is how Virgin Group will have to watch foreign holdings very closely in order to exercise their warrants. They're currently at 22% and I'm guessing that they'll try to sell their entire 3.2M share initial stake during the IPO.
Virgin Group has warrants for 60M shares convertible @$5/sh, 155M shares convertible @$2.50/sh, and 7.8M shares convertible @.01/sh. Cyrus Capital and VAI MBO Investors LLC don't have as generous exercise prices on their warrants, although the top warrant exercise price is $20/sh.
This should be an interesting stock to watch at the end of the lockup period; I expect massive share dilution. They've structured the debt to keep VX payments low through the end of 2015 so I'd expect to see a ton of warrants exercised before 2016.