Hey, lookie lookie lookie. Msg from Tim.
Hope this addresses all the FUD……
“3 posts • Page 1 of 1
User avatar
TimGDixon
Posts: 1497
Joined: Fri Jun 26, 2020 7:36 am
Contact: Contact TimGDixon
Dilution - that scary topic
Report Quote
Post by TimGDixon » Sun Aug 15, 2021 8:36 am
I see a lot of talk about dilution and i'd just like us to put that to rest because it hasn't occurred and all it does is fuel speculation and create anxiety where it doesn't need to exist.
Look at it this way.
Suppose today Mr. Wu says i'll write you a check for 13mm for 6 cents a share. Thats approx 216mm shares. And we fund our own trial not beholden to pharma and finish and get cell registration. Then suppose Mr. Pharaoh says i'll write you a 25 billion check for jadi lung pathology and suppose i take that check. The results of the 25bn check is a $1.00 EPS.
Lets say you have 1mm shares on average of 6 cents and Mr. Wu has 216mm at 6 cents.
You invested 60,000 and got 16x your money as your million shares is worth a million
Mr. Wu invested 13mm and got a 16x return as his 216mm shares is worth 216 million.
Did that dilution really hurt you and who had the greater risk, Mr. Wu or you? In my view you had equal risk but Mr. Wu's risk gave you a return of 16x your investment. BTW, Mr. Wu has to hold his stock for at least 6 months and on a 13mm dollar investment i guarantee you Mr. Wu is holding long to at least capital gains while you are free to dump your shares and take your profit out earlier because you will hit CG before he will while Mr. Wu has to wait a year or face the tax consequences.
Now Mr. Wu put in 13mm while you put in 60k. Your 60k is 1/16 the investment of Mr. Wu yet you both got 16x your money.
You see this scenario is leveraged dilution and what you all think of as dilution is usually connected to some toxic note that takes the company into a death spiral. If we raise capital it is restricted stock and not liquid free trading.
Don't let people stir you about dilution when they haven't even explained themselves.
Tim”
