XpresSpa Group Inc (XSPA)

[StockAlphaDave]

Happy to help here yet again, since there are a number of assumptions in the post that exhibit a lack of understanding of the key issues:

They should just use cash if these companies make profits - maybe they don't make profits? Oh wait, dilution preserves the cash at the expense of us shareholders. our investment just got cut by the % of dilution. Those companies need to be profitable for you to recoop that dilution. Time will tell. BTW, i was right about the dilution. It happened. Live and learn.

- why not use cash?

Well, as I've stated a few times now, most companies acquire with stock, and sometimes a bit of cash or debt, so that's the first issue. It's actually more common to use equity and debt vs cash to acquire so that first implicit assumption is incorrect!

- preserving cash at expense of shareholders and dilution?

So, some errors in assumptions here as well. Once again look up the idea of an accretive acquisition. When an acquisition is accretive it means it benefits shareholders and is an effective and efficient use of stock. It means the return of that acquisition is greater than the cost of the capital used to finance it = good for shareholders!

Also, many here know FH still has a patent portfolio that they continue to monetize as per the recent 8 mil settlement, and more importantly the material DTV case. As we've all seen having a cash war chest is important for a few reasons. First it ensures that the infringer can see the company can afford to fight, and as importantly after zte, having that cash prevents the company from falling prey to the market to pay for legal battles. This is a very important factor. Zte hurt VRNG by pushing them to the brink and where financing was difficult. By retaining a large cash balance and having recurring income, they have derisked the riskiest part of their business, for most that is seen as smart management.

Finally, in regards to this point

expense of us shareholders. our investment just got cut by the % of dilution ..

- firstly, the market didn't seem to cut the companies value in half did it? It did little, so it's assuming at worst the acquisition is breaking even, this is common sense given the price reaction, and look at the short value last few days if you think longs are selling

- second the company stated 40 mil in revenue with 20 percent contribution margin... It's profitable.

- third , on 7/06/2016 you stated

Just took my losses at 1.81 . I moved into something else. This sucker won't stop diving, I am not going to miss out making money elsewhere

Yet above you keep saying "we / our investment " - based on your quote you have no investment here?