Well, the last word you’ll hear from me, anyway. The true “last word” will apparently be rendered by the Florida Supreme Court at some point, and then, if the Court lets the company proceed with its offshore drilling, the last word will be rendered by the success of the wells — if any do get drilled (it ain’t cheap to drill offshore, and Coastal has little more than the $6.7 million raised in the “rights” offering I described yesterday).

But here’s what I alluded to yesterday about Coastal Caribbean and the S.E.C.

A few years ago, I remember reading that Coastal Caribbean had raised some cash by selling a good chunk of its offshore drilling interest to Lykes somebody-or-other (a steel company?). Part of me was pleased by this news, since it showed I wasn’t entirely crazy — a big company had decided to take a flier on this gamble, too. It also suggested that Coastal might now have the backing to “stay the course” and realize its value (if any).

But another part of me was ticked. I don’t remember the exact terms, but what a sweetheart deal this seemed to be. How come they didn’t offer it to us poor lowly existing shareholders?

Well, the answer I was told last week, when I called the company for the first time ever to find out a little about it (“buy first, research 20 years later” has all too often been my motto) is that apparently the S.E.C. wouldn’t let them issue any more securities. The company’s situation seemed so precarious (and that article in The Wall Street Journal making fun of it may not have helped) that the S.E.C. wouldn’t approve any offerings. This despite the fact that the S.E.C. isn’t supposed to pass on the value or safety of securities offerings, merely on full disclosure of the risks.

I am not an S.E.C. basher, and wish they had more staff, not less. But here was one case where it seems to have hurt, not helped, the little guy. Lykes was able to get shares and options in a private, unregulated transaction that may well turn out to be a small bonanza. (Or may not, but so far so good.)

Anyway, please forget Coastal Caribbean. But don’t forget yesterday’s lessons about “rights offerings” should you ever encounter one. Real money could be involved.

Tomorrow: Bagels


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