I just thought maybe we should sit back and read or re-read what Ray say's about dilution. If he does it is not to line his pockets but to build the co.
Rob
by RBrown » October 20th, 2011, 3:06 am
On Dilution:
While the phrase might be that youth is wasted on the young, so to might it be that economic jargon is wasted on the so-called "momentum" trader.
When things don't go the way that the momentum day-trader thought it should, the almighty word "dilution" spreads like wildfire as if its the one-all, be-all noose that needs to be wrapped around the heads of management who are standing between the present and that what the trader though it to be - or rather, that what they absolutely need it to be or heads will roll - even though it was this very belief that was created and propagated by the so-called "momentum" trader, not the soon to be strung-up management.
Justice not withstanding, at the first sign of things being other than what said trader expected (a quick and easy ride to free money) the immediate and deafening scream of all in such position is, "DILUTION"!
In response, I proffer that the so-called "momentum" trader as well as most of the so-called & often self-proclaimed "experienced" investors would neither understand when actual dilution was taking place, just as they wouldn't understand when it was actually necessary and benefitted them as they don't really know what the act of issuing stock means other they have learned that the use of the buzzword, "dilution" garners much attention when somebody else made money and they haven't.
(I'll do this in reverse order to clarify my stance): Point in fact, with regards to Energy 1 Corporation, the word "dilution" really surfaced (although there was some minor discussion prior) about the middle of September 2011 (4-6 weeks ago) when the stock was priced around $0.0012 (as of Sept 15). Since that day (and through today) the company has issued a grand total of 15MM shares (on 14 October). But also since that day, the stock ran to a high of $0.0048 (on 29 September) and then came crashing down rather quickly to a low of $0.0016 (on 13 October - the day before we issued the 15MM as stated above.)
Now, a bunch of people made (some) money during that run; but apparently it was not enough as the screams of, "DILUTION" could be heard from far and wide - as if I was robbing graves and doing nasty things to children in their fount yards.
I submit that it is the ones that didn't sell when they (now) think they should have that were then screaming the loudest, and that they are the ones that continue to scream with the biggest voices, today.
By the way, I didn't make the stock go up, they did. I didn't make it come down, they did. Oh, and by the way, the company added 15MM shares (less than 3%) to the float one day after the low, not the high. In my opinion, it is the so-called "momentum" traders that are diluted, not the stock.
Now let me explain why the so-called "momentum" trader wouldn't know dilution (or why it was good) if hit them upside the head. (I told you I was doing this in reverse order for clarity).
Lets back up a bit. From the period of when I actually took over, when I was really and truly at the helm of this company - say nine to ten months prior to this date - like say, December 1st, 2010 . . . the stock was priced at $0.0012 and had a LOT less shares outstanding. How many, you ask? 377,375,000 less, to be exact.
That's right! I said . . . three-hundred and seventy-seven million less shares, which is and was nearly double the current float at the time - meaning multiply the float by three (3) and that's the level - the awesomeness, the shear magnitude, the maliciousness - of the dilution that actually took place during the first 9-10 months with me at the helm of E1.
And do you know what happened to the price of the stock in that same amount of time, all the while suffering the massive and completely annihilatory decimation via 2-to-1dilution ? Absolutely nothing.
OK, lets be honest. That's not exactly true, now is it? It did go down for a time. It traded down to $0.0005 on July 21st where 2.1MM luck buyers snapped it up. But that's just as true as saying that on October 19th (yesterday) it closed at $0.0019, up 58% from where I took over. Wanna argue?
But you know what else happened during that same period of time?
Well, let me tell you: We perfected our technology, we built in-use units, we harvested the mid-east deal, we landed China as a manufacturer and a potential license opportunity , we got the reefer project underway and we captured the truck leasing deal we both wanted and needed for US recognition. Oh, and we now have the hybrid project in the works. No bad for tripling the float, without a price decrease, eh?
So here is the point (and I thank you for sticking it through this far): Are we going to dilute again in the future? YES! I guarantee that you can count on it. We are here to build a business, not set the table for flippers to dine-and-dash and that might requiring making some deals that require stock. If you don't like that answer, find another company or find another stock. Sell if you must (but I refer you to my previous post regarding bidwhackers). We are not here to be your friends. We are here to build a company and to make money - period. If we're successful and you ride with us, you'll make money too. If you're short sighted (or sided) you probably have the wrong deal with E1. I make no apologies for that.
So, the next person that raises their voice regarding, "dilution" better have a serious gang of muscle-bound mercenaries behind them verses a word they think they understand because they saw someone they thought was cool use it in a chat room somewhere else.
I can do math. We're worth $0.10 today, if only (and only) based on the Master Lease deal. If you can't figure that out, it means that if we diluted by a factor of 4 from today, we are currently trading at a level of one tenth of the value we should be. So, if we have to issue a few shares to pay for an attorney or a lot of shares (by the trader's count) to put some trucks on the road, we're gonna do it. And lest you forget, we're shareholders too, and we have a lot more money invested than the one who's mad because he thinks he didn't get out at what he thought was the high. ~ rtb.
RBrown Posts: 31Joined: October 4th, 2011, 1:18 pmLocation: Boca Raton, FL
Top
