Thank you dapperphil (as well as Thurston and others) for your reports on the shareholders meeting. I could not attend, like many others, so your feedback is much appreciated.
I continue to be supportive of the Etc. spin-off, especially now that we know that the Authorized Share count of Etc. has been kept low, and since we have found out today that the extra shares (above the approx 99 million that initially go to existing EXPH shareholders) will be used to cover the transfer of assets from EXPH. Thus, pretty well of the AS will be used up right at the outset. This also supports what I wrote awhile ago - this is a well-thought through plan.
Also, with only 5% of the EXPH assets expected to transfer to Etc., we see that there will not be a "stripping of EXPH" taking place, as has been insinuated by others over the past few weeks. It has also been said that EXPH shareholders will be losing big value when Etc. is spun-off -- I fully disagree, because whatever percentage of EXPH that a shareholder has immediately before the spin-off is the same percentage he/she will have of Etc. So whether you have 2.2% of one company (EXPH alone) or you have 2.2% of two companies (2.2% of EXPH plus 2.2% of Etc.) -- you still have 2.2% of the whole picture, even though it is then structured in two separate entities. There is no loss of value at all. The only downside (to some who would choose to see it that way) is that Etc. shares will not be as easily trade-able for some time -- for myself, that is not an issue as I want to hold them until they grow in value anyway.
I applaud JD for having the foresight to make structural changes now for the long-term betterment of all shareholders (and we are on an even playing field since JD and insiders own common shares, just as we do). I trust that he is working for the benefit of himself as well as all other shareholders. [There seems to be a number amongst us who think otherwise, insinuating that JD is a liar, and much worse -- not only do I find such accusations disgusting and unwarranted, I cannot understand why anyone who feels that way would even still be here; sell out and invest in another stock you can better believe in then!].
I am pleased that JD did not set up Etc. with a huge AS; there will be pretty well no shares available for dilution after the spin-off and transfer of assets from EXPH. This shows integrity and confidence, IMO.
I believe JD, Glenn Harrs and management are doing their utmost to build EXPH and Etc. They have come through very tough times, and the economic situation in the US is far from resolved yet. They are working for the benefit of not only themselves, but for the benefit of us all as they build these businesses. The lack of understanding of this point and the lack of appreciation for their efforts that is so often displayed in posts on this forum is disturbing to me. JD and staff are working day after day to build value, out of which we will be rewarded. It takes time to accomplish this. I am happy to wait for the results as I believe they will be positive.
Warren Buffett said: "The Stock Market is designed to transfer money from the Active to the Patient." I think EXPH and Etc. will demonstrate how true this is over the next couple of years.
I have been buying and holding shares of EXPH since June 2008. I was initially doubtful about taking a position in EXPH back then, but my confidence in JD and the future of these companies has grown strongly. I have added many more shares over the past month since the spin-off was announced as I want to maximize the part I will have in Etc. as well as in the future of both companies. The "fire sale" share pricing we saw in the late afternoon Wednesday may give others an incredible opportunity to do the same, IMO, as the fearful exit and believers stay.
I have no complaints and look forward to the ongoing development of the business plan JD and his people are pursuing.
All is JMHO.
NorthLion
