Attention, those of you who own Stone Energy Corporation (SGY): SGY has emerged from bankruptcy, and has issued new common shares to its shareholders as part of its reorganization plan. Shareholders who owned the position prior to the petition for bankruptcy are eligible to receive 0.17263 new shares of common stock for each share of the existing stock they owned. Additionally, SGY has issued warrants to these pre-petition stockholders for 0.622009 new shares for each existing share of common stock. You can read more about the reorganization plan here.
To illustrate how this will work, let’s hypothetically assume that you have 100 shares of existing SGY stock. Under the reorganization plan, your 100 shares of existing common stock will have been replaced by 17 shares of new common stock, and 62 warrants to purchase 62 shares of new common stock.
At this time, we are not recommending any specific action to take with regards to either the new SGY shares, or the warrants. The warrants do not expire until four years from now, and we believe that it is in your best interest at this moment to hold these and wait for the price of SGY to appreciate. When the price does appreciate, we will have a number of different options to pursue with regards to the warrants, which will include selling them in the market.
If you have any questions, please don’t hesitate to contact us at support@snideradvisors.com or 1-888-6-SNIDER. We will be happy to discuss the situation with you further.
