I'm not sure your 500/1 Split proposal can hold its logic, but we can try and make it hold its logic.
CBAI has 7,000,000,000 authorized shares. But just so we leave lee-way for any unaccounted for shares, lets say the are 8 bil...no 10 BILLION,000,000,000 shares of CBAI stock! Nobodys argues there is more than 10 Billion shares. So the rest of the talk is based on the high end of Extremely conservative numbers, as Definately there arent 10Billion shares attached to CBAI's name in any form of authorization whats so ever.
A 500/1 R/S of 10 Billion shares, after the split CBAI would have 20 million shares.
10,000,000,000 shares <---those last 3 zeros mean a stack of $1000 dollar bills stacked 33 ft high.
20.000.000 shares <---that number means a stack 7ft high.
There are several major Cord Banking companies on the Earth. The vast majority of them have O/S of between 20,000,000 --- 100,000,000. CBAI is a glowing exception. At 10 Billion shares They may hold more O/S than the entire industry combined. Even with overestimating this ASTRONOMICAL amount of CBAI O/S by 3 Billion, CBAI ends up on the Extreme low end of avg O/S share for the major players in the industry, after the 500/1 R/S
An investor who held 20,000,000 shares prior to your 500/1 split would end up with 40,000 shares. If that investor invested at the highest pps he likely could have- .0197, that investment would have cost $394,000 dollars. Think any investor with $394,000 did that? Do you think investors with $394,000 margin accounts started selling shares and shorting the stock right around that time. If so, Who are those people?
Likley the investor who has 20 million shares purchased them well below .0197pps, but still lets give him a high purchase avg of .01 - 1 Lincoln for every on of his 20mill shares of this 7,000,000,000 share CBAI Monstrosity! That the ONLY way to fix it is to go to the outer limits of shareholder value destruction, to the absolutley unfathomable, but absolutley necessary correction of 500/1.
20,000,000 shares x 1 cent = $200,000 dollars. After the 500/1 split he has 40,000 shares. I guess it would be safe to price CBAI shares as the same as CCEL's today $2.10, as CCEl is similar to CBAI and has 20,000,000 million outstanding shares, what the post 500/1 R/S CBAI would have.
The 40,000 share investor who paid $200,000 for his shares, those same shares would be worth $84,000, or an unrealized loss of - $116,000 dollars. OWEaa- thats not good.
Likely however when the 500/1 reverse split, as you package your proposal would occur at a time when the CEO was trying to save the pps from falling off a cliff. Lets make that a fairly high cliff say .005 1/2 a cent. when CEO excutes the 500/1 R/S blow. BOOOOOOMMMMMM! At .005, our post R/S 40,000 share investors value was at $100,000 dollars at the time of the split. Or half his original investment of $200,000.
So a 500/1 R/S, as you propose to save CBAI, priced at the closest competitor with the same 20mill O/S standing share as a post 500/1 CBAI - CCEl todays pps $2.10. Would leave the pre R/S $200,000 investor with an $84000 assest value. Whose $200,000 investment was worth $100,000 dollars. The 500/1 R/S lowers his investment loss an additional $16,000. The other $100,000 is just the unrealized loss from pre R/S.
If the investor had wanted to cash out his original investment prior to your 500/1 R/S, he would have taken another approx 15% loss to his already 50% loss, so a total post R/S cashout loss for the $200,000 -20,000,000 share tired of it all post 500 R/S CBAI cashing out investor would be an approx $116,000 loss or 65% of his original investment.
That same investor's negitive worth that wasnt planning on selling even after the 500/1 R/S -equal in magnitude to the investor as the Massive dillution was, would go from 50% to 65% of unrealized losses.
If the avg trade volume for CBAI pre R/S is say 25mill(not sure on correct number) 500 R/S that trade volume would leave an avg trade volume of 50,000 shares, atleast double the avg trade volume of CCEl. I think that would have a positive effect on the pps, dont you? It seems resonable to think a 20miilion share CBAI would be worth atleast $3.00pps after 500/1 R/S would be resonable, Dont You?
In reality your 500/1 R/S would produce somewhat less than 20mill CBAI shares. As we did the numbers with 10Billion O/S and there are really 7 billion total authorized. that would leave 14,000,000 shares after your split proposal.
China Cord Blood are closet competitor sells for around avg. $4.60 with around 80 million O/S.
It would be safe to assume that CBAI's 14million shares would equate to at least a $4.60 pps = giving our 40000 CBAi investor a total share value of $184,000 or $16 thousand dollars less his original pre 500 split original investment, closing his loss gap pre R/S by 84% -- I would say pretty good for that investor's value. I would think a 14million share CBAI would march pretty quickly to a much higher pps taking the investor in to profit fairly quickly. Dont you agree? It is your proposal after all.
We would have an approx $70,000,000 market cap.
With the strategic position the CEO has put us in over the past year, in an explosive industry. Sems your 500/1 R/S proposal would have many benfits for CBAI investors.
I would agree with your logic. I dont see even if a 500/1 R/S is necessary that CBAI wouldnt be in a very strong position. How many entities would be vying for 14million measley shares of CBAI? What kind of positive pps frenzy would that create?
On top of that, it would give people one less thing to complain about, as we tend not to hear too many people that complain about the lab, the China deal, the German deal,the S. American deal, the BC/BS deals. The placenta processing growth. Mostly they complain about dilution and debt, and the pps.
Kind of reassuring isnt it? Even if CBAI R/S splits at 500/1 the shareholder value would increase even if it is in the form of lessing of a % of the unrealized loss value.
Congratulations, Your 500/1 R/S proposal actually holds up to logic. I just wish you would have explained it better when you first proposed it.
By the way, CBAI can be compard to Gold, I just did it and explained why, do you see any flaw in that Logic?
Curious on your/all thoughts?
AIMHO GLTY-
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