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Re: BabyWhale post# 7265

Thursday, 05/21/2020 1:12:09 PM

Thursday, May 21, 2020 1:12:09 PM

Post# of 24817
Renae, that buyout idea is an absolute pipedream. First, understand even when those shares are issued to Ms. Chris, the price of the stock goes unaffected unless there are enough astute investors who feel like shorting a penny stock. Not likely. Most people won't notice until much later because the company will bury this in a filing and it won't show up until they file their quarterlies. Are you going to care is the question? Now with respect to a buyout, this company has been in business for 2 years. Assuming that current management owns 100 percent of PCTI and you thought you were going to be bought out in 2 years, there is no way you'd jump into a shell that had $1.5MM in convertible debt. That debt is convertible at 58% discount to the lowest bid price of the look back period. So you are basically discounting the value of your business by a significant amount. Even if the company were to get a buy out of offer of say 4x sales or $56 million, her take home from that would be reduced by the conversion of all the debt. So if she owns 900 million shares, there are currently say 300 million (for the sake of round numbers) and 1.5 million in convertible debt. If the stock is trading for a 1c at the time of the offer, the conversion price on the 1.5 million is .0058c so that would add another 258 million shares. So the buyout she ends up with with 34.8M of the 56MM buyout. Basically giving away 22 million for the privilege of being public. I ask you, would you do that?
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