Greenshift Corporation (GERS)

[jlglex]

Share Buyback Speaks Volumes

The Company as a whole would benefit, because a share buyback is one of the strongest signals of confidence in the future of a company that a management team can send. A share buyback says "we are in strong, fighting form and ready to serve the industry." It will also impact the psychology of the litigation, and the psychology of the prospective customers.

Right now, there may be prospective customers who are holding back on signing license deals because they don't want to do business with a company that appears to be so weak and has a declining stock price. The announcement of a share buyback would go a long way to overcoming those concerns and be just the thing those prospects might need to sign up.

To the extent that the defendants in the litigation are 'stringing us along,' with the hope that we will go out of business and run out of money to fight with, a share buyback will send the message that we aren't going away. They will realize that the 'string us along until we fail' strategy is not going to work, and then they will be more likely to settle.

It will also attract new money to the stock. A share buyback is one of the most widely sought after features of a stock, which some investors regard as a nearly fail safe predictor of future returns. An announcement will undoubtedly attract new money into the stock, and it will cause any sellers to 'take pause' before they sell. Why sell when the company is announcing a buyback? The combination of fewer sellers and new buyers will drive the stock price up.

As the stock price goes up, it will make the most active lists, which will attract even more new buyers. And, as the stock rises, the conversion rates on the debt improve, and the debt begins to look less dilutive.

As more and more shares are repurchased, the per share earnings projections will improve, because there are fewer shares outstanding.

In short, a share buyback announcement would trigger a virtuous cycle that feeds on itself. This stock could gain back much of its losses in a very short period of time, when a virtuous cycle like that kicks in.