Labor Smart Inc (LTNC)

[GreenHarvest]

What you mentioned about valuation is correct mathematically but practically it's almost guaranteed to cause shareholders to lose everything. After an RS, the new share price usually drops much lower than the new adjusted price, panic selling occurs dropping prices even more, image and confidence in the stock are destroyed, shareholders sell for loss or become bag holders in hopes of getting their money back. It's also a sign that a new wave of share dumping and dilution is about to start. In short, it's a complete disaster. In LaborSmart's case where the CEO has been trying to build confidence after harm was done to the previous wave of shareholders, the negative impact of an RS would be even more disastrous. That's why it's important to clarify and highlight that he seems to have learned from the previous mistakes and his promise of no RS along with the many positive developments he has been taking through the past couple of months. So no, he shouldn't RS at all.

He paid himself a huge bonus then used those proceeds to buy the shares. Nothing self invested in that.

As long as he purchased the shares with money he legally-owned, then it's self-invested. You can feel the weight of that decision when you consider that he could've put that money (his legally-owned money at that time) in any other safe investment or just keep it risk-free in a bank but instead he decided to put it in LTNC shares. Speaks volumes, right?

In fact, it's plausible that he did that to legally turn around the limitations of buyback rules that restrict companies to buyback with certain volume and time limitations. If so then it'd be a very smart move. That way, he'd be bought back huge volumes of shares that the company would never be able to buy for a very long time and probably for much higher prices and at the same time personally benefited from the situation. He could've RSed it but he didn't too! I don't know if this is right or not but I don't see it as a far-fetched scenario.

I wouldn't call buying LTNC a gamble. At least it depends on the reasons for buying. As I see it, for many here who've done extensive DD and followed for weeks/months before buying, then bought again and again as positive developments kept rolling, it's rather an investment than a gamble.