“All truth passes through three stages. First, it is ridiculed…”
– Arthur Schopenhauer (attributed)

After oil collapsed in 2018, Nabors Industries was overburdened with debt. Many peers filed for bankruptcy; others incurred massive dilution through conventional debt-for-equity swaps and liability management exercises. But the CEO, who owned a large stake, refused to dilute out his shareholders or himself.

His idea: distribute options as a dividend to his own shareholders to raise the equity to buy back his debt at a discount. When he brought it to his bankers, their ridicule was immediate and unanimous:

• Too complex
• Stock will drop
• It’ll create an overhang
• Shareholders will hate it

So he turned to Lazard, which meant it came to me. I loved it. I refined the concept, adding an early expiry feature to take out timing risk and a provision allowing shareholders to exercise with cash or company bonds so they could capture the debt discount. The CEO’s eyes lit up: “You mean to say I can get my shareholders to do my debt tender for me?”

But not a single major bank would support it. Even Lazard decided this type of capital structure advisory work no longer fit into its business model.

So in 2019, I founded B. Dyson Capital Advisors to focus entirely on strategies that challenge Wall Street orthodoxy and help companies finance without diluting out their shareholders.

In 2021, Nabors decided to move forward with the further refined B. Dyson Capital Advisors strategy. The board still wanted external validation. None of the major banks would step up. But an independent banker at a respected energy boutique, trusted for his integrity and known to the board, gave it an enthusiastic thumbs-up.

The company moved forward. The stock rose 25% that week. Shareholders understood it instantly. The strategy worked even better than anticipated.

None of the banks’ ridicule proved true.

The CEO was so pleased, he applied for a patent with me as his co-inventor.
Seven option dividend transactions later, each one improved from the last and the results speak for themselves: Shares have traded up on every announcement.

Shareholder enthusiasm exploded across social media.

Why? Because shareholders finally get what the owners of a business deserve: a seat at the financing table, not dilution forced upon them. It changes the adversarial relationship between management and shareholders when financing to alignment.

And everyone loves free options.

Except the big banks, who don’t much like their business models being disintermediated by a simple and powerful new idea.

So, as that Schopenhauer quotation suggests, the pattern is familiar, and the banks, right on cue, redoubled their efforts and pushed straight into stage two…