North West Oil Group, Inc. (NWOL)

[wishmd]

I am not sure I understand your point, vis-a-vis what I wrote. If more stock is issued, it is based on the stock's current selling price, not on the EPS. A company that has NO earnings, but whose pps is $5, can safely issue shares at the diluted value based on the # of shares outstanding, or close to it. This is based on # of shares outstanding, not the authorized as you said.

At .40, with 600,000,000 shares outstanding (restricted shares mattter, they are still outstanding, though not currently in the float), an issue of 100,000,000 shares into the market is worth $40mm at best, probably more like $35mm. At $5, a 100,000,000 issue would be worth around $500,000,000 at best, or around $430,000,000 based on dilution. For NWOG to issue shares at the current price would make no sense, but it would be probably worth it at $5 or better.

Let's imagine our stock is selling for $10. NWOG needs cash and issues the entire additional 400,000,000 shares. The diluted value would be $6 (10 x 600mm / 1000mm). The company would likely be able to raise at least $2,400,000,000. It would be different if the shares are used to increase the company's holdings, in which case the increased anticipated value would come into play.

That's why I said that it is not a problem short term.