What I think is extremely worrying for AMGG shareholders is the 30,000,000 authorized shares at par value $0.01 that were part of the 12/29/06 amendment. These haven't been talked about up to now, but the presence of this other class of share may have diluted ordinary AMGG shareholders out of existense.
If these shares have the same status as the other (870M, now 870K) authorized shares, say for instance in entitlement to dividends, then this is what has happened since just before 12/29.
Prior to 12/29 there were 540M authorized shares of the type people here were buying/selling. I think all of these were issued, so these 540M shares represented 100% ownership of AMGG (SCMI then). The 12/29 amendment authorized 330M more shares of this type and also 30M shares of a type we have no information on. So the collective owners of the 540M issued shares will own just 540M/900M of AMGG once these additional authorized shares are issued. That is 60% before the RS.
But what is interesting about the RS from last week is that there has been no reverse split of the 30M other class shares. So after the RS, the collective owners of the original 540M shares (as of 12/28) now only own 540,000/30,870,000 of AMGG. In other words, they have gone from 100% ownership 6 months ago to 1.75% today. That is a staggering dilution.
A reverse split normally has no impact on the percentage ownership of the company that a shareholding represents, as you have less but now bigger slices of the pie. But when there is another class of share and that share class does not undergo the same reverse split, then that other class of share ends up with a lot more of the pie. So for normal reverse splits if your total number of shares in the company represented 1% ownership of the company, then you would still have 1% ownership after the RS. But in this case here, if your holding represented 1% of AMGG on 12/28, today it only represents 0.0175% of AMGG. In other words, if you had valued your shares based on a certain projected earnings of AMGG, earnings now have to be 57 times greater for you to arrive at the same value per share.
This is assuming the the class of share represented by the 30M is the same as the class represented by the 870M, now 870K shares. But worth noting is that the par value of each of the 30M shares is $0.01, but that of the 870K shares is just $0.001, so it is even possible that a share of the class of shares represented by the 30M has more value than a share of the other class. They could have 10 times the value. So instead of being devalued by a factor of 57 (57 times less), your holding may have been devalued by a factor of 570 (570 times less). All pre 12/28 shareholders may have gone from collectively holding 100% of the company to collectively owning just 0.175%. The owners of the 30M shares will own 99.825% if AMGG.
Since AMGG is non-reporting, it will be difficult to know what those 30M shares represent.
AI
