Service Team Inc (SVTE)

[samroux]

I would counter several things you itemize here, but I don't fully have the energy. I will address this...

6. The stock conversion yesterday was a lower level miscommunication at JMJ (one of four institutional creditor/investors), but Bob said rightly, “The good side is we have to get all these notes converted and out of the system (anyway).” The company is ultimately right sizing at the same level with share reductions regardless of when any conversion takes place. Bob even suggested some remaining convertible debt might be paid off. (If Bob can settle out the relatively small amount of remaining convertible debt one way or the other along with everything else happening in March, I’m all for it, too much hyperbole and misinformation about it.)

There is no good side to that note hitting yesterday. Had the note been held off, and assuming the terms allow for it, the company could have bought it out, which would have kept the O/S from bloating further. Even if it wasn't bought out, if the company appreciates its share price like it claims it wants to, the note then could be satisfied with say... 16 million shares hitting the O/S instead of 700+ million.

The fact that the CEO is so indifferent and would call it a "good" thing doesn't lend much credence to his desire or plan to reduce the share structure. If I were the CEO of a company, and my stock just "accidentally" added 700 million shares to the O/S when I had plans to reduce the share structure / uplist, I would be very unhappy. It also doesn't lend much credence because, now, it'd cost Bob a lot more money to buy those shares back than if he just bought back the note. Those shares, even at today's pricing, would take $245,000 to buy back.

The company doesn't have that cash. That'd represent 35% of the company's net profits. You think they are going to start chucking 50% of their earnings into a share buy back, something that does not grow the company whatsoever? No, they aren't. And if the price appreciates a bit and ends up in a 4x5 channel? The cost of buying back those shares would begin to exceed $400,000. It's not happening.

It also begs the question... how can this company have plans to sign a 15 million dollar revenue generating company (the cost of which would be significant)... AND do a share buy back? Never mind the fact that they are not cash flow positive.

It also ought to make one think; how do you actually know there was a miscommunication? Bob admitted FINRA turned him away for a reverse split, the stock was sitting at no bid, and you have mature notes. That's a recipe for... say anything to get liquidity back into your ticker.

Point is, take nothing this guy says at face value. The fact that he's talking about wanting to reduce his share structure, then has a lackadaisical attitude when a small value note turns into 700 million shares... is very telling in a very bad way.