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Friday, August 19, 2016 11:00:41 AM
I think this is a good business to be in but as I have stated before it has multiple capital structure issues. Also of note is that the franchisee which Sakl purchased had been losing money putting on these events and that is why they sold it to SAKL.
Unlike others I think Surber is trying to do the right thing here. Trying to clean up a mess as best he can but he needed cash, has preferred shareholders that want out and now a convertible toxic note.
The biggest problem was the preferred shares convertible into tens of millions of Common shares. Just one 6 million share conversion dropped the stock from 15 cents to 5 cents before the modest bounce up. Then the convertible note was issued, again convertible into millions of shares, and that will create selling pressure as well and might even push the preferred shareholders to want to convert more of their shares given the price breakdown.
Since all the "good news" on revenues is already expected, the financials will not do much for the stock price. Plus there will be a later year revenue slowdown.
Personally, while I love what this company does, and do not feel Surber is out to ruin anyone, I think this will take a while to settle and it will be at lower prices perhaps much lower prices.
Those prices combined with audited financials and and some kind of lock up of preferred conversions and an end to the convertible note might provide a buying opportunity but I think it will be a lot lower than now.
Honestly I am not here to bash but have seen these convertibles in action before and really love what this company does, I think it is the future of entertainment. But everything lies in what exactly you own. And if your piece keeps getting smaller due to more stock outstanding than it is hard to see this going up (for now).
I wish investors and the company luck . Gonna watch this one.
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