Okay.. after re-reading the paragraph, I think I have my interpretation of it instead of listening to the pumpers/bashers, etc etc.... (gee whiz.. I guess I have to do everything myself as I should have).
Basically it is sort of a dilution (this is not 100% proven of course as the 10sb doesn't say where the shares will come from - whether from thin air or from existing restricted shares - but I am sure it is 95% likely it is from thin air). That being said, you will get the equivalent of $15 per share after the share issuance (whether or not it will stay at that price, however, is not guaranteed).
It is not a dilution in the traditional sense that most poeple think of dilution however. The big difference is the price reset. But otherwise it is similar (assuming of course the shares are issue from thin air - which is probably the case - and will have to be the case if the PPS drops to a rediculously low price on Oct 30th).
The formula he uses assumes that the pps does go above the square root of 15... if it does, the formula breaks. That is not addressed in the 10sb. If the stock is at $4 for example (which would be great by most longs anyway, since by definition, nobody should have bought this stock at over $4), then there is nothing in there about guaranteeing $15.
So it basically is a similar scenario to the $15 reset - although unlike the $15 reset, there is less of a chance the shorts will have to cover (that is bad), also like the $15 reset, there is no guarantee that the PPS will hold once it is reset (just becuase you price a stock something, doesn't mean it will hold).
The real reason to hold this stock is to make sure that the shorts will cover.... I don't see how this will force a cover.
May Rufus is thinking that the stock will be easier to sell with so many shares out there if the PPS is low?
