On another very important topic (Preferred A Share Structure), I have emailed Tim the following. I believe the Preferred A structure is a primary reason we are down in the gutter price share wise.
To:ir@calbayinternational.com (Tim Garlin)
Subject:Cbay's Preferred A Stock Structure Concern
Date:Thursday, January 25, 2007 10:14:55 AM
Good Morning Tim! I would appreciate your providing Roger with a copy of this email.
I have spent a considerable amount of time thinking of options for Cbay's current Preferred A share structure. It is currently an approximate 3.5 billion dilutive thorn in the "perception of the market." Hence, I sincerely believe the market is factoring in that dilutive possibility in setting a very low market value of the common stock. It is about $.03 today. IMO, the market doesn't see the Preferred A being beneficial to shareholders since the shareholders IMO will not be able to maximize in participating of any type of takeover hostile or friendly. It will benefit mostly Cbay Corporation as the owners of the Preferred A and leave the common holders stranded with minimal value left.
Whether it is perception or even real for that matter, I believe the problem is Cbay wants to control the destiny of the company from a share structure standpoint, and I don't blame the CEO since he has personally grown the company quickly from nothing to what it is today. However, due to the fact the company is a public company and shareholders are needed in earnest for the company to continue to be a great success, I believe the shareholders need to be given the opportunity to participate in the company's growth from a share price appreciation perspective. Hence, the Preferred A has got to go away in total IMO.
Nonwithstanding the initial good intentions of Cbay concerning the Preferred A, the market and myself included has a perception that there is a good chance the Preferred A will be issued at some point and continued dilution will occur, hence, a massive reverse split and the cycle continues until the shareholders give in and have nothing. That is the primary reason the common shares are priced where they are today IMO. A shorts paradise and a harsh pill for any potential longs to swallow. Proof is in the hundreds of OTC and Pink Sheet companies that go this route and fail. Dilution then reverse split then dilution ect., while the share price never goes anywhere except in a downward spiral. Cbay does not need to do that with their strong growth and revenue and profit prospects. Cbay's common stock has been in a downward spiral for several months even without a major rally and with continued good news and growth.
I'm suggesting Cbay's board consider immediately canceling in total all the Preferred A to help jump start a share price appreciation spiral. Cbay can consider giving a Poison Pill Preferred Stock dividend to Common and Preferred B shareholders for each certificate or pro-rata, etc. This would bring in shareholders from the aspect of being able to share front and center any hostile takeover offers.
I commend what the CEO has done to date from a growth and financial standpoint with Cbay, however, there is too much at stake to risk running the company like a private company when it is not and honestly I don't think it can be run successfully that way in the near future with the Preferred A Share overhang.. Take a look at the share structure of Nasdaq and other OTC companies. You will most likely not see a Preferred A convertable share structure like Cbay for Poison Pill purposes or any Preferred convertables of Cbay's magnitude in any other company share structure.
This thorn in the markets Preferred A perception of what otherwise is a strong growing company is killing the stock price and keeping the company from attaining fair market IMO. It's not the operations IMO. The company can always reconsider down the road a Preferred A highly convertable Poison Pill approach if this new plan does not reap some immediate rewards for all. I believe it will and Cbay's share price will command full attention by the investment community.
Time is money and opportunity for company growth here folks! The Preferred A thorn has to go ASAP IMO. Have a good day!
Regards,
