Gandalf, you make some good points and share some of my feelings and concerns.
1. I agree that CB does deserve a bigger share of the company. The preferred shares being given to him for the old loan is very reasonable and the ability to multiply them by 3x seems an adequate extra reward. From the moment I first heard these shares are not going to be split, I have thought that is wrong; it is just too much leverage to be happening all at once. I think that he should be given additional shares as a reward for achieving production milestones that increase the value of all of our investment. So, even though I don’t like the way it was done, I do feel he deserves to have a bigger stake of ownership for all the ongoing hard work he has done; he has almost single handedly built this company out of the scraps of other companies. This guy has been living and breathing “building this company” 24/7 for the 4 and a half years I have owned this stock. I feel that he deserves to be the dominant shareholder. Personally, I feel that 35% is a higher chunk than I think it should be – but I can live with it.
2. I have been in the camp believing that the 500M OS after the split is excessive and tempting for potential abuse. At the same time, it can also be seen as everything the company says it is (currency to make timely deals, reward staff, and averting a buyout). It all depends on how carefully they limit tapping into it. Knowing that tapping into it will dilute CB’s shares too should help make him think twice.
3. I agree that him having more shares will align him better with the interests of the shareholders; diluting “shareholders” will mean diluting himself also.
4. All the talk about “kicking out the BOD and CB” and essentially turning the company upside down scares me. I agree with what ctb has been saying about “then what?” is on point. If this were to happen, I would not be investing this much money in something that would then be in such an unknown flux in terms of leadership and skills. From the beginning, my investment in AMEP has been an investment in CB and his ability to build this company and build it into a profitable O&G junior.
5. I agree that having the shareholders approach CB with the hostile and antagonistic attitudes that I have been seeing from many here lately is a formula for certain disaster. I may not like or agree with these latest moves by management, but I still think that AMEP is better off with CB in charge that it will be if the company is gutted with hostility and we have to start from scratch.
6. This is the “bottom line” of my fear….if there were to be a forced management change, who is going to run this thing and how can I know that they are going to be any better shepherd of my investment than CB has been. I don’t know enough personally about the O&G business to be any help and I don’t have the time to be part of reorganizing the company, and I don’t know all these anonymous posters well enough to put my money in their hands. CB is a “known” entity to me and, in spite of some areas of disagreement, I trust his ability to build the production side of the business better than anyone here (except BSD).
I think we would have more success at this point taking a cooperative approach with CB utilizing the skills of GR, GEH, contractor, ctb, tharmon, sabre, and others that have respected communication with management. They can still help us a lot to improve CB’s understanding of his responsibility to give more consideration to his shareholders. I think that with management’s interests more aligned to shareholders (i.e. increasing shareholder value by increasing the pps) that we will be able to get better communication, better representation on the BOD, and other changes to enhance shareholder value. I am not happy about this whole RS twist and the negative effect it has had on the pps, but it is real and we need to deal with it. My fear is that escalating this into a bitter war will only hurt everyone. At this point CB is AMEP and us passive investors will only end up hurting ourselves if we try to do a hostile takeover.
If this deal were to pass, I will have my “upside” limited by more than I originally expected it to be, but then again I realize now that it is inevitable that CB would be awarded some shares at some point and time for all that he has done. The dilution from the restricted shares will end up causing some additional dilution but this will be offset by ramped up production. This is what kona on RB had been wanting AMEP to do a couple years back. Going the “slow road” has not worked so well for us, so I am somewhat excited about the possibility to get this company finally ramping up production. Even putting 2 new wells online on a consistent ongoing basis for the next several years will result in this investment rewarding all of us even with the dilution involved in this proposal.
If this deal were NOT to pass, I could live with that and would probably PREFER that if it could be done without creating a hostile relationship with management. Up until the last couple days, I was planning to vote NO on this, but seeing so much hostility by so many posters here and hearing of some of the rude comments towards management is scarring me and making me realize that this is likely to get nasty. With that information thrown into my considerations, I am feeling that my number one option (a NO vote wins but a cooperative atmosphere is maintained with management) may not be reasonable. That leaves me to choose between a nasty battle with a YES vote win (resulting in moderate dilution but immediate accelerated production) and a nasty battle and a NO vote win (resulting in a pissed off CB, a battle over the BOD, and a protracted period of major distractions from building production, and possibly having to re-staff and reinvent the company).
There are just too many unknowns and too much time involved with “cleaning house” with management. I realize that sticking with CB is still risky but this has always been a high-risk, high-reward investment. I bought my shares because I believed in CB and, based on the options now in front of me, I need to decide what choice will result in the best return for what is left of my $.03 pps investment. If there is a way for there to be a NO vote without a hostile relationship being created with management, I will vote for it. If this is not possible, I would rather lose some upside to dilution but see the production ramp up in August and I am confident that this increased production will result in far more gain to my investment than will be achieved by a protracted, hostile battle with management or a takeover that results in many far more dangerous unknowns. CB may have diluted us for his own gain (partly deserved), but I still feel he is the best person to lead AMEP (and carry us) to this becoming a successful investment.
Not everyone has the same risk tolerance and many have different investment objectives. I definitely appreciate many reasons why many investors will not agree with me and understand that they are completely correct – for them. I have been invested for over 4.5 years and I don’t want to see my investment continue to be trashed and potentially destroyed. I don’t want to start over. Maybe this won’t be the investment that allows me to retire, but I think that by maintaining a cooperative relationship with CB, this can still be one of the best investments in my life. By cooperation I don’t mean we should agree with anything, but we should not be threatening him; we should be educating him about how enhancing shareholder value is enhancing the value of his investment too. I still think that both GR/Nelderand and GEH have enough of CB’s ear to effect shareholder friendly changes in management through continued discussions. It is less risky to cooperate than to start a battle that may potentially cause the company to implode. I understand why the efforts are being made to fight this and I agree with many of them. Many have said they wished to hear why anyone would “be so crazy” as to consider a YES vote, so I have tried to give some of my reasons. It is not that I want a YES vote, but it is that I FEAR the very real potential for a NO vote combined with a hostile battle to create negative consequences and dangerous unknowns. I fear investor anger not properly controlled and channeled will end up doing more harm to our investment than the dilution involved in the proposal would cause. I think pushing this situation to involve taking legal action or making SEC complaints will do more to cause everyone to lose their investment that it will help enhance our investment.
I know this is a difficult decision for everyone; so I know there will be a lot of ongoing discussions. Please be respectful of each other’s opinions. We don’t all think alike or have the same needs/goals; there are reasonable reasons to be on both sides of this issue.
Mike
AI
