Alto Ingredients Inc (ALTO)

[wadegarret]

Kel/Rule_62- 120K share Preferred dividend payment

Do you know whether the dividend payment to the preferred shareholders has historically been in stock ? If so, the payment of 120K shares isn't that big a deal, as it's consistant with the form of prior preferred dividend payments. However I do agree that the CEO is not exactly inspiring confidence with the common shareholders.

However to me, it's all about earnings going forward from operations(I would disregard warrant value changes as well). My feeling is, assuming fully diluted 25M shares, earnings fully taxed at 35%, and a 10 PE going forward the stock is worth about $18-$20. This assumes around $.50 going forward(into the Dec qtr) fully taxed and diluted(25M shares)

To me, this overides whatever stupidity in the eyes of investors, that the CEOs actions of paying off preferred dividends with common shares proves. Hopefully the superb ethanol enironment & rising margins right now will keep the stock going up towards fair value.