Cotton & Western Mining Inc. (CWRN)

[vesta]

The reverse merger will of course necessitate a reverse exchange to reduce outstanding shares to make the upgraded stock more attractive over the longer term. But what happens immediately after the reverse exchange is worrisome. At worse it could be bad to very bad for current shareholders in the short term. Firstly, many nervous sharholders will interpret the reverse exchange as a reverse split and they will panic sell. This in itself could lower the the pps significantly. Also, because the reverse merger will result in a larger more complex company, this will likely create significant new debt. This new debt will likely be dealt with by dilution in the short term, thus reducing the pps even more. Year 2012 could be a great year for CWRN, but I fear it could be a terrible year for current shareholders. I welcome arguments for this projected worse case scenerio.