A company's stock should only be used as M&A currency if its well valued by the market--not beaten down as CBAI's stock has been for years. To issue it for an acquisition now is just another form of dilution to existing shareholders. Well run companies don't issue shares when their share price is down. Let Red Oak manage the CBAI's stock price back up to a more reasonable level for a least a few quarters before they ask for a 2 billion share blank check.
In fact, it would be best for us other shareholders if Red Oak isn't able to convert its preferred shares to common--at least for now. Their preferred shares really aren't very saleable unless someone wants to step into their position of controlling a little company with a checkered history, still significant debt load and an uncertain operating future.
If the number of authorized shares is increased and Red Oak converts its preferred to common, guess what will happen if the going gets tough? They'll start dumping and drive a renewed downward spiral in the stock price. Let's don't give them that option. If the authorized share count isn't increased and Red Oak can't convert to common, they have no choice if the going gets tough but to continue to work hard to manage the company to a good place. On the other hand, if the operating results and share price improve significantly over the next few quarters and they come back and propose the authorized share increase, they have made a much better case for it. I don't see how the rest of us shareholders benefit in any way by approving a share price increase now.
