Apologies in advance if this has been covered.
From the PR:
"According to management, prior to the split, common shares held just under 50% of stockholder equity and voting power(1). After the split, common shares hold 2/3 of stockholder equity and voting power(2). The total issued and outstanding shares of common stock and preferred stock on a fully diluted basis, which was 29,500,750 will then be 44,500,750."
(1) While technically true, the statement neglects to mention that the two company officers own around three quarters of the common shares. So between their common share holdings and their preferred share holdings they hold around 90% of the voting shares pre-split.
(2) Again, technically true...common shares will represent 2/3 of the voting shares. However, the total common and preferred holdings of the two officers will still represent over 80% of the voting shares post-split.
The tone of the PR isn't totally straightforward.
"Management clarified that the class of shares to receive the dividend are the common shares only and not the preferred class of shares held by company executives."
True, but they fail to acknowledge that management's own common holding will also double its share count, remaining well in excess of the "retail" common share count.
"The dividend results in a transfer of equity from company executives to our common shareholder base."
The officers will have a smaller proportion of the total voting shares, but will still control the company. The so-called "transfer of equity" has little, if any, real benefit to the common shareholders, whether financially or in terms of control.
That's the way it looks to me anyway. I can't see any real benefit to the common shareholder at all. Today they can sell all their shares if desired. Post-split half of their holdings will REALLY be holdings.
Those are my principles, and if you don't like them... well, I have others.
(Ladies and gentlemen, the one and only Groucho Marx.)
AI
