IT'S ALL OVER FOLKS.
Let the race to the exits begin. Last one out turn the lights off.
There is no reason to think that the astronomical A/S increase to 30 billion shares is for anything other than more of the same--dilution, dilution, dilution, then a R/S. IMO the increase was necessary for no other reason than to cover all of SEEK's debt that SG cannot pay with anything other than newly-minted shares.
As noted in the latest filing, SEEK has 4,929,462,636 shares of common stock and 640,000 shares of Series A Convertible Preferred Stock outstanding.
Note that in the most recent 10Q from October, SG only had 540,000 shares of preferred stock, so apparently he has issued himself or another investor (Fife?) another 100,000 preferred shares. These convert at a rate of 10,000 common per share of preferred. They are also R/S proof, which is why you often see company insiders converting large holdings of common shares into preferred stock just prior to a reverse split.
So, there are approximately 5 billion shares outstanding. Add to that the 6.4 billion shares that the preferreds can convert to and you have a total of 11.4 billion shares.
Next, the last 10Q discloses that seek has $1,181,850 in debt notes, with at least $500k of those due January 1, 2015. There is also the $250k loan from Fife taken out in October. These types of loans typically convert to shares at a rate of 40-50% of the lowest PPS in the 5-20 days preceding the conversion date. Right now, the low has been .0004, so IMO it's reasonable to estimate that the conversion price for notes would be .0002.
So:
$1,181,850 converted at .0002 equals 5,909,250,000 shares. Add in the current O/S and the converted preferreds from above, and you have
5,909,250,000 +
4,929,462,636 +
6,400,000,000 =
17,238,712,636 shares.
Then add the $250k of debt to Fife (converting to 1,250,000,000 shares at .0002), and you have a total of 18,488,712,636 shares.
Now also keep in mind that the PPS seems very likely to hit .0002 or lower in the next few months with all the "debt reduction activities" that SG has planned, which means a conversion price of .0001 or lower. That would double the number of shares requires to satisfy the debt, so instead of 6-8 billion new shares it could take 12-16 billion or more, as they could convert below .0001 and sell at .0001 to get their money back until there is literally nobody who will buy the stock and SG is forced to R/S.
Add all that up, remember SEEK's declining revenues, and consider that SG has probably had to take out additional debt notes to keep the company running this quarter, and you start to see why the A/S had to be increased to such a ridiculous amount. All together you are getting pretty dang close to 30 billion shares. I don't see much left for an acquisition lol.
If anyone wants to get an idea of what to expect around here in the near future, go check out the HR-dee-N board from about May 5 on (that's the day they filed their 14C announcing an A/S increase to 30 billion, I think somewhere around post #27,000). Just as happened there in the weeks/months that followed, leading up to the inevitable R/S, I expect some new faces showing up around here spreading buyout or acquisition rumors. Longs and other SEEK faithful will try to convince that the increase is a good thing, that it is for some business purpose other than continuing dilution and debt financing, that news will come soon and we will all be golden, and so on. But as I see it there is absolutely no justification for thinking that SG has suddenly changed his ways or has some big trick up his sleeve. The writing is in the wall IMO: He is diluting this down to no bid and then will R/S and keep going until SEEK either goes bankrupt or gets bought out. Either way, anyone currently holding this stock will see their investment wiped out. SG, of course, will be fine because his 6 billion preferred shares are dilution-proof.
All my opinion of course, but I think I've called this one pretty well so far...
