interesting read.
Wednesday, January 6, 2010
CBAI - Outstanding Shares Growing At An Alarming Rate
For anyone that actually does research before investing in the stock market, it wouldn't take you long to realize CBAI's outstanding shares have been growing at an alarming rate.
In August the outstanding shares were:
2,611,087,327 as of Aug 10, 2009
In November the outstanding shares were:
4,568,253,327 as of November 9th, 2009
That is an almost 2 billion share increase in one quarter. Factor in the latest dilutive SEC filings and CBAI's outstanding shares are likely close to its almost 7 billion authorized.
No matter how you try to paint this pig, it still looks ugly. The business model can be pretty, but with the amount of shares that are being dumped, demand will not be enough to keep up with supply, and the stock will inevitably fall.
I'd like someone to explain to me how a company that almost doubles its outstanding shares in one quarter deserves a $100 million market cap. It defies logic.
Today's press release is vague. Just how did they retire the debt? They didn't say how. Are people just letting them have the money? I think not. It was likely converted into equity, meaning MORE dilution. The balance sheet might look better, the debt load may decrease, the company may have a bright future, but the amount of shares will continue to increase... and when you are a shareholder in the company more shares equals less of a stake in the company, which isnt' what you signed up for.
