Just re-reading the preliminary proxy filing for the June 7th shareholder meeting and want to highlight these statements:
The increase to the number of shares of authorized common stock will allow NeoMedia to continue to pursue strategic acquisitions that are funded through the issuance of common stock. As of the date of this filing, NeoMedia does not have any plans, proposals, or arrangements, written or otherwise, to issue any shares of the newly authorized common stock to acquire additional businesses.
The issuance of authorized but unissued stock could be used to deter a potential takeover of NeoMedia that may otherwise be beneficial to shareholders by diluting the shares held by a potential suitor or issuing shares to a shareholder that will vote in accordance with NeoMedia’s Board of Directors’ desires. A takeover may be beneficial to independent shareholders because, among other reasons, a potential suitor may offer such shareholders a premium for their shares of stock compared to the then-existing market price. NeoMedia does not have any plans or proposals to adopt provisions or enter into agreements that may have material anti-takeover consequences.
Based on the above, it appears to me the primary reason for requesting the additional shares is to deter a takeover possibility.
The million dollar question is are we better off allowing Neom to continue going at this alone or be bought out by a "Big Gorilla" company? Does Neom really have the wherewithall to become the SuperCompany that they desire without an infusion of cash from a Big Gorilla? A takeover would most likely have short term positive effect, while going it alone may be better for all in the long run but we may be living with a low pps for quite some time yet.
These are the important questions going through my mind as the June 7th SHM approaches, and are the driving force for why I decided to attend this meeting.
To be quite honest, I haven't yet decided how I am going to vote on the share increase proposal, and may not make-up my mind until hearing Management's presentation at the meeting (unless of course further explanation is presented to us in the interim).
Presently, I have a lot of faith in Management. But, it will most likely take a much better and more elaborate explanation in order for me to vote "yes" on approving an additional 4B shares of possible dilution. A much lesser number would be much easier for me to justify based on present information available.
Comments?
SS9173
AI
