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Re: nobody12378 post# 17959

Friday, 07/29/2011 11:03:13 AM

Friday, July 29, 2011 11:03:13 AM

Post# of 52845

The great imponderable for me is KK leaving the A/S at 20 billion! That action speaks more loudly than statements about future revenue ramping up to the point of positive cash flow. KK had to know that this action alone will keep the PPS suppressed. He would not have done it if he did not think he would have to use it. An O/S count after the R/S of 14 billion would, on its own, reduce the pre split value by 99.9%. Ollie, do you have an answer other than the obvious why KK left the A/S at 20 billion?



I do think KK is fully aware the high A/S will have a negative impact on investor confidence.

I think he left the A/S at 20b for the following reason:

if the PPS holds after the split he's diluting by only millions of shares to service the debt until its paid off. conversely, if the PPS drops like a stone (penny market dynamics, skidish investors,etc) he'll need to dilute billions again each quarter to deal with conversions.

I think the big question is, what may be right around the corner that will boost confidence sufficiently to hold the PPS somewhat steady after the split?