Let's go through some basic scenarios, shall we ?:
Assuming Reed's is in for $1M backstop investment (perhaps JP agrees to sell their all natural beverages in all locations) Maybe it's nothing but Drifter did find that document and they are sort of a neighbor to Giggles !! That beverage facility location is at 13000 South Spring Street in Los Angeles, California. Reed's sales revenue could also use a boost.
Maybe Jillian even invests some of her own money ?
- I will save you the math, but just calculate out how many shares would have to be issued to raise their sought after $5M goal? The dilution would absolutely crush us. Who would want to participate if the offering prices at a deep discount to current PPS ? If you stop and think, you would be destroying the o/s and float!
Now, if it prices at say $1.75 per unit, what is your reaction ? Probably befuddled and wondering WHO would ever participate with those high prices ? Dilution would not be a big factor, though, as maybe 3-4M shares eventually get issued ??
*** Thing is - you will not know if ANYONE did participate until end of March. What IF $2.5M is miraculously raised and Joey immediately announces 3 new stores opening come early April ? That is why it will be so interesting to see what it prices at. I am just wondering how long they can go without publicly announcing it, especially if you have to own GIGL by the close on 2/23 - (THIS FRIDAY)
IMO - there is a better chance of it pricing higher than a deep deep discount because JP would be jamming himself. I find it ironic that the wording goes through great pains to state that the pricing may not be tied to current price and the stock could be volatile. Don't forget, this entire offering could still be terminated as well.
No matter how it goes, it should not have come to this. There is absolutely no question that our CEO is in way over his head/skill set. One problem, though - the damn concept works and demand seems to be increasing per current reviews. For me all penny stocks are a gamble but if this one hits, the upside would be HUGE with such a locked float. I doubt people are going to sell for a few pennies of gain on this one.
