Maico >> "I don't know if I quite understand how they make money at an ever cheaper PPS,"
Flint offers an example in their reporting of how they determine an issuance of stock: If Flint needs to draw 50,000 dollars from the account, they will issue shares to Kodiak and that issuance will depend on the PPS at the time. If the PPS at the time is 0.015 the number of shares issued is 3,508,771. However if the PPS is .0061 the Number of Shares issued for this same draw would be 8,223,684.
So the PPS at the time does not effect how much money Kodiak can recover in their sell of stock. It does effect how much more dilution will occur. If the price drops in half Kodiak simply am increased number of shares for each dollar given to Flint. Brown has stated it is in Kodiak's best interest to sell the newly issued shares quickly, which will cause the price to drop again before they make their next transaction with Browne. So each transaction results in lowering the PPS and subsequently requires a greater number of diluting shares on the next transaction.
Each such transaction requires a campaign to get investors excited about buying the new shares being dumped on the market so we see encouraging statements in the PRs. I have been encouraged even recently by such statements, interpreting them to mean we have turned a significant corner toward profitability or that dilution would finally be stopping. Like the following:
“We also plan to fund most of the acquisitions with long-term debt and deferred stock grants as much as possible that will reduce the funding we need from new share sales and deliver a better return for our shareholders." Browne (March 3, 2011)
"This is another step in our goal to become operationally profitable this year and to build on our vision of increasing shareholder value…” Browne (April 4, 2011)
"Flint management has taken this decision with the agreement of the parties involved to allow Flint progress ongoing negotiations with potential debt providers for the transactions in order to avoid using equity as the sole funding source given recently low share prices that would not be beneficial to shareholders at this time." (August 11, 2011)
However: I see the same old stuff. A positive press release, some new investors show up and a rally of buying huge volumes of cheap shares occurs. Then suddenly buying is exhausted and we see aggressive selling at any price no matter how low the bid goes...and shares once considered to be a bargain don't seem cheap any more.
We know in the past there were groups paid by Browne to promote the stock at these times because the posters even declared themselves as such. I am not sure such practices are even legal and I've found some information suggesting it is not. This is a hugely risky investment based primarily on trust in CEO Vince Browne's PRs and Reporting. Lots of investors have come and gone having found their investement simply gone, not lost due to business failings but actually being gleaned to fund business operations.
Browne gets money from Kodiak >> Browne issues shares to Kodiak and issues a positive press release >> you buy the Kodiak shares >> Kodiak sells way more shares than buy interest will support to move the PPS up. The PPS drops, investors get discouraged and run away. >> Brown gets more money from Kodiak >> Browne issues a greater volume of shares to Kodiak due to the lower PPS and issues a positive Press release >> more buyers come in to buy the cheap shares. The cycle repeats itself over and over again to fund FLTT.
AI
