I've been thinking a lot about why MRNJ would have done some of the things they did and are continuing to do. I have kept quiet here for a while, because I didn't want to be one of those sellers who comes back to bash. But I'm just so furious (and curious) that I am going to open this question for debate.
This is ONLY A GUESS/HYPOTHESIS!! Discussion/comments welcome.
OK, it is a fact that they used shares to buy up some companies to form present day MRNJ. Upon completion of those acquisitions, the sellers held large chunks of MRNJ.
Presumably the folks selling the companies were not savvy enough to impose anti-dilutive restrictions (because we are certainly seeing a lot of dilution!). So, one simple way for management to regain control and ownership of the company is simply to dilute the former owners' share ownership to smithereens.
I've been thinking all along that mgt is just hugely inept about share structure. But now I am rethinking this. Maybe they really are exceedingly savvy and ruthless. They used scarce shares to finance acquisitions. Then they capitalized the firm and pushes the former owners to the curb by selling a TON of shares.
Eventually -- once they are done diluting -- I would then expect them to award themselves a large chunk in one last massive flurry of dilution. Then they can award themselves as many shares as needed to give themselves large ownership percentages.
Nice job if they can do it and get any sleep at night. I wouldn't have the stomach for it.
This company has great technology from what I can tell. But if I am correct, then one must wait until one sees management award themselves large blocks of shares. Only then will management's incentives be aligned with those of shareholders -- because clearly that quaint concept of "fiduciary responsibility" isn't getting us much traction.
Wadi
