RushNet Inc (RSHN)

[otterman]

A buy back would be the best solution for shareholders but the logic defies reality.

- The company wants to buy back at the cheapest price possible so it costs them less.

- The opposing side to that is that shareholders can be reluctant to sell because they want the best price possible, and that coupled with the market expecting better value for the shares once the buyback is complete tends to drive the price up almost immediately thereby costing the company more! Its a vicious circle.

And yet buy backs happen all the time. The timing is also prohibitive for most investors as the restrictions on how the company can buy back shares can cause the solution to take years, which is even more likely in RSHNs case due to the high OS.

Its still the best solution. An RS would only rape shareholders of potential value ( if you held 1mm sh you'd make $10,000 for ever penny RSHN increased however after a 1 for 500 RS, you'd be left with 2000 sh and a $20 increase for every penny in SP, less than attractive for most. Keep in mind that after an RS, IF the company is solid, the SP may start increasing by dimes or quarters but remember you'd have to have a $5 SP increase to equal your profit potential before the RS). However most RSs result in a convenient way for the company to begin dilution all over again. This especially happens in the pinks.

And yes there are hundreds more ands, if and buts related to this but Im not going to cover them all.