Dominoes and Band-Aids
Mark's been harping on a dominoes falling in serial fashion for some time now. There's for sure no way they could proceed without additional shares, the first major reason is that they've been in default with their convertible debt holders since the summer. That needed to be fixed. My gut (for what that's worth) is that Anshu is trying to mitigate dilution while also creating some optionality for the variety of things discussed and speculated on here on the board. My best guess is that any real dilution we see as a result is the outstanding convertible debt converting and being subsequently sold in the open market as we experienced last year. My thoughts there are 1. I think the majority of that has happened and 2. there are good reasons why remaining preferreds could want to hold on rather than convert and sell in any case.
I was pretty surprised as a the scale they chose for the authorized shares. Everything (which was a big jump from my earliest purchases in the ~250M range) that existed in outstanding shares now totals 20% of what's possible fully diluted. That's not super comfortable. I did note the paragraph about thwarting takeover attempts in the filing. That also makes sense, assuming the execution moves into second gear from here. If I were Anshu, I wouldn't want my plan I've invested a couple of years of my life into disrupted when things were about to take off, either. So with the expansion of authorized shares... My view has been for some time it was coming, because it had to come. Rip the Band-Aid off and let's execute.
Domino #1 down. What's next? I sure hope there's a PR domino or 3 in the near future.
