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Most of the negative focus on the stock price seems to be the reverse-split, but my main concern has been the post-reverse-split stock offering (dilution). They filed a S1 prospectus last June to sell shares after the reverse split is enacted, and for the longest time I've been assuming that they were selling a predetermined 1.9 million shares after the reverse split. But now that I read it again, it looks like they're not specifying the number of shares they'll sell, only the number of dollars they raise. It looks like the number of shares sold will be determined by the price of the shares sold. They are selling $10 million dollars worth of shares, and they were just using the reverse-split price of $5.25 as an assumed reference number. But if the only thing known is the number of dollars worth of shares they're selling, then the amount of dilution will be based on the current market cap of the stock at the time of the reverse-split, right?
The current market cap is $145 million. If they add $10 million worth of new shares, they're only diluting by 6.9%.
If the share price gets up to 0.25 before the reverse-split, the market cap would be $213 million. Adding $10 million at that point would only be diluting by 4.7%. If the share price gets up to 0.50 before the reverse-split, the market cap would be $427 million. Adding $10 million at that point would only be diluting by 2.3%. However, if the share price drops to 0.118 (The September & January lows) before the reverse-split, the market cap would be $111 million. Adding $10 million at that point would be diluting by 9.0%.
Am I understanding any of that incorrectly?
If so, then the higher the share price goes, the higher the market cap will be at the time of the stock offering, and the lower the dilution will be. Anything is possible, but I don't see the stock going below the recent lows of 0.118 before the reverse-split. So if 9% is on the high side of the amount of dilution we'll see after the reverse-split, I don't think it's as big of a dark cloud as some have made it seem to be. Especially if they continue releasing more (and hopefully more positive) news beforehand, so the higher the stock price gets, and the lower the amount of dilution there will be. At the current market cap, it's only 4.7% dilution, which I consider negligible if they only enact a 31:1 (or less) split to get uplisted to a larger exchange, with new traders & investors, while leaving plenty of shares available to enable liquidity.
No on knows anything for sure except the CEO, and anything can happen, but based on the more recent abundance of PRs, and the number of recent S1 amendments, I'm currently modeling that the reverse-split will take place in the next 30-45 days, and assuming (hoping) that they won't have to go higher than the originally proposed 40:1 max reverse split. If the stock price is higher than it is now, I think it'll be closer to 30:1 or lower.
Don't worry, someone is dumping a few hundred thousand shares again (most likely CSC), and the bid is in the 4's now. You'll have plenty of time to reload as low as you'd like soon. If Kim is saying now that good news could come as early as Jan 2014, which no one here should really expect to happen (if he qualified it with a mid-2014 date, then that is the more likely time-frame), that means we will have at least 3 months (possibly 9 months?) with no new news. I seriously doubt that the SP can handle a lull that long. I'm guessing we'll see the low 4's in another month (hell, maybe even the next week), and possibly break to the 3's again. If it bases there for at least a month, I will be buying more trade shares and just waiting for the January PRs saying that "they're still on schedule to make tons of silk by mid-2014" to sell into.
Well don't leave off the next part...
"A more conservative estimate, given the realities of launching such a ground breaking and commercially unique project, would be to reach that major milestone in mid 2014."
How many time estimates has Kim given and met them? And how many have been missed? I take that qualification that he gave himself to mean that it will be at LEAST 9 months before anything is going to happen with this company. And even then, the timeline will probably be much longer than what is given.
Why on earth would you want SSM to buy out KBLB? Their annual revenue is listed as $17.5 Million. That's revenue, not profit! Even if they had 50% margins, that's still less than $8.75 million in profit (you have to take out other expenses to get profit). Even if they make $8 Million per year in profit, and even if they saved up 10 years of profit to buy KBLB, they could still only give us $80 million for 650 million shares. That's 12.3 cents per share, or roughly the current stock price. So do you really want SSM to buy KBLB?
I agree, not low volume, but I don't think it's very significant. I do think that some people are taking profits before the shareholders meeting and conference call, and it's not an un-wise decision.
Look at what the share price did after the last conference calls? It goes up as the CC nears because everyone is hoping that KBLB will finally be making profits. But then when the day that we might be profitable happens gets pushed back, the share price has a small, but quick drop and then a long but further drop until more expectations are near.
I had bought some shares after the first rise, around 7 and 8 cents, and I have already sold most of them, some in the high 12's, but most in the 11's. I still have lots of shares that I've had since 2010 that I won't be selling until this thing reaches $1+. I still don't know if that will be this year though. One of the lines that worried me is the announcement of the conference call where kim wanted to talk about his plans for "2013 and 2014". I don't think he would be even mentioning 2014 if the news for 2013 was very good and/or very near.
This is of course, just a guess, no one really knows what is going to be happen. But I am pretty sure that after the CC, the share price will go up a lot, or down a lot.
The split cannot be for liquidity because it's all relative. A 2 cent stock may trade 1 million shares a day, while the 20 cent stock would trade 100,000 shares a day. Saying that they took the stock from 10 cents to 1 cent for liquidity is false because yes, the stock would trade 10 times as many shares a day, but they would only be worth 1/10th of the value. So KBLB having to sell X amount of shares means nothing when they're worth 1/10th of the previous value.
I do, otherwise I wouldn't have requested it. If you don't want to read what I write, feel free to put me on ignore.
Is anyone else starting to get a lot of Penny-Stock spam at the email address that they use for InvestorsHub? I setup the email address that I use just for InvestorsHub, and I have never used it for anything else, and I have never told anyone else about it, but over the past week, I have started getting daily spam emails at that address. These are not messages from InvestorsHub in any way, these are penny-stock promotion newsletters that I have been added to (ExclusiveStocks, PennyTrader, etc).
Is anyone else seeing the same thing? If so, then either InvestorsHub has been selling or giving away their user's email addresses, or their user database was stolen. I have read their privacy policy, and it specifically states that user's email addresses will not be shared with or sold to any third-party. I just wanted to know if anyone else was seeing the same thing before I contact IH about this.
Ok thanks. Most stock newsletters post their disclaimers as images so that when they are copy/pasted or indexed by search engines, the disclaimers won't be available.
Also, the link at the bottom is to unsubscribe you from their list, but the domain name http://1st-stocks.co.uk/ is now down "for maintenance". :)
Romans, can you please post the full disclaimer at the end of the email? TIA.
Rayovac, I know that you know that this is a stock pump newsletter (pump and dump). You even mentioned PIEX from the post and noted that it was down to .09, which means you looked it up. If you saw the chart, I'm assuming that you saw that it was down 91% from the "pump".
And what exactly do you agree with in this "good write up"? There was nothing specific in it. The guy just threw out some generalities, speculation and related names. If this is an "article" or a "good write up", then I would consider the SWA pumps to be on the same level as the PNAS works.
So let's be realistic. If you couldn't stand to see Mojo calling the new lab "a shoe box", how can you call this "a good write up" without sounding just as ridiculous?
That was my first thought after seeing the "article" posted. Why was the disclaimer left off?
I'm sorry if you aren't able to follow
First, someone wrote
and if this is true why disclose the 10 mill at all if you were not required. 5% of 600 mill is 30 mill
it says nothing about 5% just that you have to disclose the amount
I didn't say that you were spouting off anything. In fact, I never said anything about you at all. But your reply to my post (that was about a specific fact and a specific person) had nothing to do with the original topic, and it still doesn't. You replied to a post about a specific fact and you're trying to relate it to everything else. My original post that you replied to was about something specific, not about everything else.
What is the truth, according to you?
Haha, yeah, I was still a little confused. But it's ok, I'm sure I get that way sometimes too. I try to just keep a logical flow of thoughts, and it's easier for me to stay on track.
I'm sorry, but I still don't know what your point was, in relation to my post at least.
SWA Pump = a negative or dilution right? That much should be obvious.
If the stock is going for $21.00 per share, and the placement of shares in the financing deal is for $15...well guess what that does for the valuation of those shares you just bought at $21.00. It drops the value and you see an IMMEDIATE drop to those levels($15) on the exchange. So you sell on this news to buy back when the price stabilizes. It happens regularly.
As soon as you see a pump, there is a negative connotation attached. They flat out tell you they have shares to sell. Is it required by law to notify via small print disclosures? I do not know. But those disclosures = SEC filing notifications effectively.
I/We do not know if the selling of those shares is for general administrative expenses or the pilot program. My DD says it is the collaboration with company XXX route, and the dilution is normal administrative expense dilution. I am in the dark though...until I read it in a NR, filing, or see the outstanding shares on the rise.
I'm sorry, I read that 3 times and I still do not understand what you're trying to say. I would like to though, so if you wanted to write it in a more logical (step-by-step) way, maybe I would understand then?
So if SWA is selling KBLB issued shares, is it for general expenses as usual, or to pay for this pilot?
Well I am positive about the fact that he is at least talking about commercialization and giving at least somewhat near-term time frames, but I still don't understand the point of releasing a PR every week when not much is being said (actually, I do understand, the point is to help pump the stock up so that the person that they sold shares to can sell those shares for a profit). Each one of those PRs is costing them between $500 and $5000. They are getting that money by selling shares (diluting MY shares). That is ridiculously stupid, and a poor way to spend money. A PR to announce Big Red and to announce a production pilot program, yes, those were substance, but why weren't they done in one PR? That was a waste of money. Every PR after those was a waste of money as well.
The ever-positives are saying, "You wanted more frequent communication, you got it, and you're still unhappy." We wanted the company to give a status update more than every 6 months, no one said spend money (AND DILUTE MY SHARES EVEN MORE) every single week just for the sake of doing it - that's what a company blog is for. Kim, quit spending MY money on useless PRs and put the information where it belongs, on your website, for free!
Lol, I guess you don't buy the board hype as late.
let see. if they are still pumping in MAY then that statement holds true they will be pumping and selling at the same time. and I believe if they had shares other than the 10 mill restricted they would have to disclose that.
the simple fact of the matter is, pumping is done to sell shares...it would do no good to pump now to sell in may...obviously there are shares to be sold now...
That is es1 saying something absurd. It was meant to be funny... Not to make you take him seriously.
Same here, but it seems that everyone wants to skew facts to meet their agenda - both positive and negative posters. I find it funny when they add things like "Let's stick to facts" after their post to make there statements seem like facts when they're just as made-up as the people they're contradicting.
SWA is pumping but they are not selling if they only have restricted shares. Lets keep the "FACTS" straight.
lol, well I'm an equal opportunist, so I'll accept it.
I don't want to be lumped together with the absolute positive posters or absolute negative posters, because I am neither of those. I think that thinking in absolutes is the first mistake to a bad trade. I accept all realistic possibilities, both positive and negative, as just that - possibilities. I don't think that all possibilities are equally as likely to occur though, and that's where I think that faith and hope have a role.