I think that's been the plan all along.
SG said it himself on the last CC from my recollection... They're admittedly barely spending any money on "traffic acquisition" and instead are purely focused on "eliminating debt." SG portrayed that goal as some kind of strategic initiative, which I guess it is, but not in the sense that it benefits shareholders. Rather, quite the opposite.
That's because the debt is not being "paid off" in the usual sense of the phrase, rather it is being transferred to the unknowing public via conversion of debt notes (corresponding to a massive increase in the O/S) followed by relentless dilution as debt holders sell their discounted shares. Put simply, SG raises the A/S in secret to 6 billion shares, then takes out loans from various financiers. The financiers then convert those notes to free trading shares at a huge discount. They then sell those shares to the public, which, given the lack of interest, winds up clearing out the bid at ever-lower prices per share. Put even more simply, this process screws investors who buy up the never-ending supply of shares entering the market every week.
I think SG does not care about website traffic at this point, or the PPS, or his shareholders best interests. Instead, I think his goal is to get SEEK to the point where it is free of debt (through whatever means and at whatever cost), and is basically a conglomerate of half-baked websites, a rented office space or two, and various other intellectual property and mostly non-functional websites. Then, the goal is to sell those assets to the highest bidder.
Yes, that means a buyout, but not before SG has done a R/S to clean up the share structure, screwing over the longs. He has carefully hedged his words and promises to leave open the possibility of an R/S in order to make SEEK more attractive for a buyout. I imagine he will hint at a share buyback in the coming months to stoke additional buying interest to keep his dilution/debt clearing plan running. Whether anyone thinks SEEK is worth buying will IMO be the plot line of SEEK in 2015.
The bottom line is, the only one who really wins in this scenario is SG himself. He gets to take on large debts building the beginnings of a viable business, then transfer the liability for those debts to the investing public as note holders convert and sell their many millions of shares for a hefty profit, and then sell his interest in the company for personal gain while investors are left flapping in the breeze, waiting for the pop that never comes. An R/S comes, ostensibly for the good of shareholders to "attract institutional investors" or "position SEEK for a buyout" or whatever, according to the PR that will likely be released, but we will all know that is complete BS when it comes.
Today's trading action was orchestrated and intended to draw in traders who think they will be able to buy in at .0008 and sell at .0013-18, but the interest is just not there. Give people a little bit of hope, and then use that to keep them buying and holding as the PPS goes down to no bid.
Penny stocks are mostly share selling scams, except for the rare gem, and SEEK is not that IMO.
I will try to be civil and not laugh too hard when the R/S eventually comes...
AI
