If and when shares that are not outstanding as of the r/S are sold to the public, acquired by a BP as part of a partnership, merger or acquisition, don't we shareholders receive our proportionate share of the proceeds?
Your share of the proceeds is certainly proportionate to something. But, what Stealthy is referring to is that management now has the capability to dramatically shrink your share.
Prior to the R/S PPHM had ~236MM shares outstanding and 15MM reserved for options, which left around 75MM authorized.
Those 75MM represented a maximum of 31% dilution if they were to issue all of them and then sell the company.
I'm sure you wouldn't have liked, but could certainly have lived with getting 30% less than you could have if management had done that.
But now, once the R/S takes place there will be ~47MM outstanding and 18MM (assuming 15MM in the new plan and 3MM existing shares reserved for options). Together, that leaves 260MM shares available for further dilution.
That means they can now dilute your shares by up to 553%.
If having only 1/5th the shares you used to have isn't bad enough, if management goes ahead and issues all those shares before the company is sold then your share of the final take is going to be reduced by another 5.5 times.
Regards,
moby
AI
Market Data 
Markets 
