News Focus
News Focus
Followers 13
Posts 1305
Boards Moderated 0
Alias Born 11/03/2009

Re: diannedawn post# 53008

Thursday, 02/17/2011 4:01:54 PM

Thursday, February 17, 2011 4:01:54 PM

Post# of 105535

Can you give me ONE logical reason why they need to increase the AS IMMEDIATELY other than they plan to start USING those shares IMMEDIATELY???



Dianne, It's called leverage. Several people on here have explained the reasoning behind the A/S increase, and so has Matt. Please try and keep up.

Matt Schissler After the RS, why dilute the shares again to get the share-holders back in the hole?

Ans: You're making and assumption that I can't speculate on. So lets go into theory. We know that MEX purchase price is $17.8M approx. Our NPV calculations on the samples (70,000) is $70M (1,000) per sample. So we are paying 17.8M ...to get 70M NPV. This isn't dilution, this is a huge win for all shareholders. Just quadrupled the value. The market seems to settle in on the right valuation over time. Now, Lets look at history. We paid a total of $7M for the 5 acquisitions we have made so far. And our market value went from $2M to $25M in that time frame, so we got a net $23M of value for $7M in cash. The market still had us a $25M valuation prior to Friday. I would argue that is correct (basically our sample base asset value, minus our debt and shareholders deficit). Again, this is theory, but it is the theory we run our company by.


Discover What Traders Are Watching

Explore small cap ideas before they hit the headlines.

Join Today