GEE Holdings JOB Stock News

GEE Group Inc (NYSEAMERICAN: JOB) is flying in the market this morning, trading on gains that are better stated in multiples than percentages. The gains come after the company announced that it has eliminated more than $47 million in debt. Here’s what’s going on:

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JOB Stock Gains In Multiples On Debt Elimination News

In the press release, GEE Group said that it has successfully completed and closed a recapitalization and financial restructuring. The move significantly strengthened the company’s balance sheet and led to the elimination of more than $47 million in subordinated debt.

Importnatly, the restructuring also included mezzanine preferred stock financing while adding more than $40 million pre-tax to its stockholders’ equity. Key points from the refinancing and restructuring include:

  • Substantial improvement in the JOB financial condition and leverage ratios.
  • The elimination of about $47.4 million in subordinated debt.
  • Elimination of 100% of subordinated debt and preferred stock mezzanine financing.
  • Only long-term senior debt remain.
  • Stockholders’ equity increased by more than $40 million.

In a statement, Derek E. Dewan, Chairman and CEO at JOB, had the following to offer:

When we began the recapitalization and restructuring process, we did so with a clear objective of strengthening the Company’s financial position, improving GEE Group’s capital structure and better positioning the Company for future success. Now that these transactions have been completed on very favorable terms, we are most excited about the Company’s growth prospects and its ability to maximize shareholder value.

This News Is Huge

Prior to the completion of the financial restructuring, GEE Group was not in the best of financial positions. However, with the announcement of the financial restructuring, the company has laid a strong financial foundation from which to build.

Considering the newly-found financial stability, the stock started to head up, triggering a short squeeze. While the stock is likely to dip from today’s high, now is the time to put JOB stock on your watchlist.

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