If IMSC had 125M shares but no debt and the above listed agreements in place, what do you think the stock would do? My feeling is, even with nearly 80% more shares, the stock would easily double from its 50 day average. Now, if you agree with that, and if you are a lender you might make a loan package available at a fair rate that might include a warrant opportunity ( bonus) in lieu of a convertible. I know I would do so readily.
As long as no large shareholder is selling it really does not matter how many shares you have, the price will go up on good news. I think Buldoc has to bite the bullet here and just say goodbye to DMRJ and BAM in March even if it leads to a temporary bloodbath on the price as DMRJ converts and sells its 8c options beforehand in a frantic bid to make $5m debt morph into $75m cash.
It will be better for the shareholders and his 1.40 options in the long run if all this convertible debt is replaced by a long-term loan at low interest with no convertibles in March. The point is if the company starts posting profitable quarters in May he has a window of opportunity before then to sort out the capital structure as the stock will recover as it did after 2009 with bargain hunters, day/swing traders and maybe even Institutions entering the fray if profit is shown.
However there has been no hint of such a change of debt strategy with Buldoc openly and publicly defending DMRJ like they are his best buddies against shareholder disquiet. I think Pickens III can be a bit of clown sometimes with his public verbose grandstanding but this beats even his excesses.
AI
