Good post from Soapy regarding the Form 4:
Ok -- few different ways to spin this depening on what you expect to happen. This is my opinion and a few random thoughts. Don't think that the shares sold are worth anything -- see them as a tool to derive risk free revenue.
The first thing is to know that this was a DIRECT sale from TS to a private person. This implies that none of it will touch the OS, nor will see the light of day for a long time. (Think about it, why would TS sell to a person that would screw over the stock? He wouldn't and that means the restrictied shares won't be redeemed for a very long time.)
Now -- the cost of the stocks. If you noticed, the purchaser paid a hell of a lot more than what the stock is worth. Now why would someone do that? The answer is simple -- they know a few things should be true:
TS sold them to the purchaser such that both he and the purchaser know the stock will attain that level.
TS realizes that selling the stock to a FAMILY member will make them quite a profit AND open a line of credit w/ the family. Think about it -- if you gave a family member a collection of stock that will skyrocket, they will be more than happy to forward you cash so you don't have to go to a bank or firm. In this way TS avoids all mess w/ convertibles. In essence his family is helping him to use the C's as a source of revenue that's risk free; and can be used NOW. (Keep in mind his family is LOADED.)
TS now has a risk free 2.7M USD in addition to the Fund. From what I know, I think it's about 8M total.
This allows TS to straight up BUY his next M&A target w/o the dilutive convertibles we've all learned to hate. He won't need people like Cornell/YG or other such venture capital firms.
Now look at what GS is doing - they are RSing everying they own into smaller OS's and will soon shift debt of the parts we're going to buy. Thus TS's cash can buy up the B's (the ones that give their holder control of a company) and the necessary number of common shares as to assume control of a GS company. The stock purchase of GS will place the profitable portions into TS's pocket (using CASH) -- making the M&A simple and profitable for SWVC. No loans, no convertibles, no nada.
Once that happens, then all of this will change and we're gonna see some major PPS.
Even more than what we will get on Monday.
Now -- cashing them in waaaaay the hell in the future. Let's say they do cash them in when the stock is worth at least the price that stated on the 4. Here's the trick I think which makes this work:
TS will have huge margins and good profits from the restructured WiseB, Hacks, and the Permolex contracts w/ GS. (We will own all of that by this time.) If the family wants to sell, TS can perform another DIRECT (Guess: at discount) sale and repurchase the C's w/o diluting the OS. In this way the family get cash, TS gets the cash for M&A, and nothing stupid happens w/ the OS.
So, think of this as a way to build risk-free credit that'll fund everything now and will be paid off later w/ the profits coming from all the M&A and restructuring.
As usual, IMHO. Feel free to rip it up.
ALL POSTED BY AMERICAN_PSYCHO IS EITHER FACT OR OPINION.
