So now the remaining CLNY shareholders eat 100% of the losses from the crap assets while gaining less than 70% of the digital assets (and management fees and carried interests). This from yesterday's 8-K. Read slowly and carefully so you understand the impact of what CLNY just sold.
".....the Equity Investment, along with the investment made pursuant to the Carry Investment Agreement (as defined below), will represent an approximate 31.5% interest (the “Interest Percentage”) in, and implies an $805 million total valuation of, Digital Colony IM. In connection with the Equity Investment, Wafra is entitled to participate in net management fees and performance fees generated by Digital Colony IM."
Don't forget to notice the warrants which dilutes the upside (not the downside) of future stock price gains:
"Further, in connection with the foregoing transactions, on July 17, 2020, the Company issued to Wafra Strategic Holdings LP, a Wafra affiliate (the “Warrantholder”), five warrants (each, a “Warrant,” and collectively, the “Warrants”) to purchase up to an aggregate of 5% (on a fully-diluted, post-transaction basis) of the Company’s Class A Common Stock, $0.01 par value per share (the “Class A Common Shares”). Each Warrant entitles the Warrantholder to purchase up to 5,352,000 Class A Common Shares (subject to certain customary adjustment provisions as described therein), with staggered strike prices for each Warrant ($2.43, $3, $4, $5 and $6 per share, respectively) and are exercisable until July 17, 2026."
IMO, the terms of this deal just reek of desperation on CLNY's part.