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Re: NoMoDo post# 41055

Monday, 01/27/2020 2:36:34 PM

Monday, January 27, 2020 2:36:34 PM

Post# of 41311
I was privately asked about the RS and how it affects the value of ownership of shares.

Imagine if there was one very large pizza and 8 people each got a really big slice. Then imagine that 5 of those people decided that the pizza should be sliced into 64 slices and everyone would get 8 smaller slices. Those 8 slices equal the same bigger piece before being cut, so nobody complains.

What if those 5 people decided on cutting the pizza into 100 pieces? No big deal as everyone would still get the same total amount of pizza.

Further imagine if after the 100 piece cut, the 5 people decided that their fat friend Frank could get some pizza if he brought milk. They ended up giving Frank 99 of those pieces in return for milk. When the milk was doled out, each of the original 8 people got a thimble of milk to go with their bread crumb.

The problem isn't with the number of cuts of the pizza, it is the giving 286 times current ownership to the target company.