GATES EXPLANATION OF REVERSE SPLIT
I would not call the original run a full blown Pump and Dump because Behl has a sound product, employees, work in process. We all know enough about them to conclude the company exists and will continue to prosper.
At this point 700,000,000 shares @ .008 = 5,600,000 market cap give or take a few million.
If I were Fish I would R/S this dog. Fisher has no control over what is going on. He is doing (in my opinion everything he can to move the company forward in order to generate revenue stream)
700,000,000 / 5 = 140,000,000 @ .04 = 5,600,000 post split and many will argue we will immediately lose value per share price.
I would argue that the strong LONG TERM investors who hold a majority of the float will stay put no matter how volatile the price flips.
Now for argument sake end of Q2 of 2010 rolls around and let's say we have $ 6,000,000 in revenues with a 30 % net profit margin plus another $ 1,000,000 in pure upfront PBR fees
1,800,000 (6 mil*.30) + 1,000,000 = 2,800,000 in Net Income for the quarter. At this point for the first time ever BEHL shows revenue and more importantly profits. It does not matter where the stock was before. What will matter now is how SMART MONEY will begin to calculate fair value, book value and market value of stock.
A reverse split would spread greater Earnings on a lower share base.
2,800,000 earnings / 140,000,000 shares = .02 earnings per share
Now we are in an emerging GREEN ENERGY industry with lots of Fortune 500 investment along with Government grants, subsidies, investments etc. We could easily see a Price to Earnings ratio between 15 to 30 times forward earnings. I will us 20 times in this example
.02 X 20 = a solid 40 cents per share PPS however that is only based upon 6 months of business. So, if we are showing growth quarter after quarter then to annualize this would be .02 x 20 x 2= 80 cents PPS.
My opinion is the future PPS will begin to be based upon revenues. Fisher knows that. The sooner headquarters are up and running the faster we sign more contracts thus begins real revenue
