NO pilon, IMO, you have it backward. While you all think Pike is your savior, in reality, i see a quite different scenario.
Pike acquired 100 mm block shares of SPNG directly from M&M sometime in Aug at the standard 30%-40% discount to market (market price $.15-$.18, his price $.106) He is told the shares are free trading. Pike, doing what hedge funds do best, quickly shorts 100mm shares over the next few days and thus, protects his down side and knowing that he can always cover, if necessary, with the 100mm he has just acquired.
Sometime after shorting, Pike, probably via the NY Post article, learns of the forged Opinion Letters and now realizes the shares should have been restricted. Thus he cannot use them to cover but must buy retail shares to cover. Being more than a little angry, he goes back to the Mutt Bros, demands to be made whole, strikes a deal and holds the original 100 Million shares hostage to the fulfillment of that deal.
In reality, Pike isn't losing money at all. His first 100mm cost him $10,600,000.00. But he sold the 100mm short at an average PPS of $.16, grossing $16,000,000.00. He covers at an average PPS of $.045, spending $4,500,000.00. He is slightly up ... and still has 100mm shares to sell when they become unrestricted ... which should gross him another $2,000,000.00 - $5,000,000.00. The kicker is, that the Mutt Bros, by mutual agreement, are funding the buying. Pike risks not one thing and makes a tidy profit. Perhaps the deal Pike struck calls for the return of the 100mm shares when the cover is completed. i would expect that it does. Worst case scenario, Pike makes $1,500,000.00 on his $10,600,000.00 investment in just six months! Thats an annualized return of 28%+! His investors should be happy with that.
What do the Mutt bros gain? One less legal battle ... with a guy who knows the ropes, has the goods and would not hesitate to bury them in a New York heartbeat.
What are the implications of this to shareholders? For, one, when Pike reaches 100 million shares bought, he is done. Secondly, if the original 100 Million shares go back to M&M, the six month restriction will fall off at the end of this month. Just what do you expect the Mutt Bros will do with that 100 Million shares? i would think the probable answer is obvious.
BTW, the volume was so heavy in Aug that the shorting of 100mm shares wouldn't have caused a blip.
"Libenter homines id quod volunt credunt"
AI
