At the time of the Dec. 1 deadline for buying into USSE to get the SSTP spinoff 1:1 dividend there were 650 millions shares. That is equivalent to 1.3 billion shares total outstanding to existing shareholders if the dividend had gone through as promised. Now we have how many billions extra in SSTP shares? At least a dilution to a third. Some capitalization is to be expected, but for that amount of shares we should have been able to set up shop without partners.
You can't compensate USSE shareholders with SSTP stock as USSE has none to give them. The current shares of SSTP locked up in SSTP are the company's and provide the only current value to USSE. Giving them to USSE shareholders would destroy USSE and would come no where close to compensating the prior shareholders. Not to mention anyone who bought USSE in the meantime thinking there was value. They would get no SSTP shares and have a worthless USSE share on their hands.
SSTP can't just print shares and give them to USSE shareholders. They do not owe anything to USSE investors, their responsibility is to the SSTP shareholder. I say they can't, but JR did do it one time when he gave 2/3rds of the USSE company to SSTP for no compensation. I guess the only good thing in the give away is JR could have given away all the shares except one share and called it just compensation.
Since SSTP was a spinoff (for lack of calling it what it really should be called) of USSE, merging it back in would have created this whole mess for what reason? Other than make a few people very wealthy in the semi IPO that occurred. We would be back where we started but now with billions of more shares. The whole premise of SSTP's existence, green credits and government subsidy, would then prove to have been a ruse in the first place, and now abandoned as part of the on going company's plans.
In a merger you would not own any more shares than you do now. Several individuals who were gifted shares in this process would have been given these out of thin air. I bet Redwood owned the shell and got a nice windfall out of the deal for doing nothing but providing a shell. Someone had to sell those shares at .30 cents to the new investors that first week of SSTP's existence. So there would be one happy merged company with many increasing their share count and/or wealth in the merry-go-round except original shareholders still stuck at a minus.
Making SSTP a subsidiary doesn't change the above math, it would be only slightly different than what is currently in place. The only thing USSE owns at this time is the SSTP shares as JR has de facto created a new USSE in SSTP, and is letting the former whither. The whole mess makes ones head spin.
The kicker in all this is the transfer of assets into SSTP could be struck down in court as fraudulent. Then what would this mess look like?
The best thing is to let SSTP be successful and start the Olympic legal games. It is headed there one way or another.
AI
