Comstock Inc (LODE)

[NJPortfolioManager]

Thanks for the response. I also think that it is prudent to remember that Winfield is not a limitless cash-cow. Just like many other major individual investors and institutional players, the current market situation has put a squeeze on a lot of people's liquidity (not to mention the fact that their illiquid assets have also fallen in value).

If faced with a cash shortage (and this is all speculation, since I don't know Winfield's financial position... but you have to plan for the worst), I seriously doubt that Winfield would have a market for someone to buy his GSPG debt from him. This would only leave him with one of two options: (1) convert his debt into equity shares based on the contract and sell them in the open market (horrible for the share price), or (2) put GSPG into default to seize and sell the assets (also horrible for the share price).

Just like many people advocate diversification of stock holdings, it's also important for GSPG to diversify their sources of funding (to avoid a situation like that above). Unfortunately, most banks and institutions (who are getting very picky with their new loans) won't lend without seeing some form/ability to repay (cash-flow is king, in this case).