I agree Zen. It is now clearly apparent that the dilution of shareholder value by 4 million shares began effecting transaction pricing Feb 2nd at 2:15 EST when the private placement was announced. The 2.2 million shares under warrant appear to have also diluted shareholder value, even though they have not reached the $4.17 strike price yet (but certainly will given a 5 year window).
IMO... apparently to mask and confuse the effects of the 6.2 million share dilution, the two acquisitions were also announced at the same exact time as the private placement. This was followed one trading day later by the GE deal, which apparently leaked out Feb. 5th judging from the market gyrations. Once stablized on the 7th, the share price settled to a trading level of $3.50.
The total dilution of share holder value is .89 of share price (50,000,000/56,200,000). Equivolent investor valuation factoring in the market impact of GE is $3.50 X .89 or $3.115 per share.
With the close today at $3.12, it would seem the marketplace has now digested the GE news with the dilution effect into the shareprice. IMO, LAKingPhan is correct that dilution has been occuring. The decline in momentum he noted since the GE announcement reflects its quick absorption into buyer pricing.
You may recall I originally raised the issue of dilution in post #3734. I also fear the cost impact to TKO of GE's custom product requirements over the next 6 - 12 months. It will probably have significant negative impact on future earning through 2007. Likewise, the two acquisitions, if concluded, will likely result in a flat, to slightly negative impact due to an increase (temporary?) in operating expense.
We'll see what TKO has to say in it's guidance during the CC, or interview, or whatever they issue for a year end offering. However, I expect to see flat guidance and a deteriorating financial picture as the year wears on. That will weigh on the share price from here on out. I would jow regard TKO as dead money through 2007. Perhaps the institutions see the same thing.
