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es1

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Alias Born 07/13/2009

es1

Re: None

Friday, 11/25/2011 4:00:03 AM

Friday, November 25, 2011 4:00:03 AM

Post# of 278617
Thought I would repost this with a little editing since the information is important enough to make sure it is understood.

For those who don't understand, I will attempt to explain the "dilution" issue as regards the acquisition of a new business subsidiary.

If Kim buys a million dollar business with shares That is not toxic. You see the business is called an asset. Since I would assume any business he buys would have an income That would lead to earnings and those earnings are also assets.

In case you have not researched what an asset is, they would increase our market cap and therefore it would increase the value of our "diluted" shares in excess of the cost of diluting those shares.

That is how google made their INVESTORS rich. That is how Kim will make his investors rich.

Absolute share price means nothing when looking at a company. If google was to dilute 10 million shares (without gaining assets) their share price would instantly drop 5%. Yeah....nobody would care...

It is percentage that makes a difference in the change of value of a stock.

Google dilutes 5% they drop $29
KBLB dilutes 5% they drop .005
If you hold a million shares you lose more on google but they are worth more so the loss is equal.

However...

Google dilutes 10 million shares they drop 5%. ($29)
KBLB dilutes 10 million shares they drop 1.6% (.0016)

huge difference.

This is why it is percentage that is the important measure!


Think that kind if dilution will hurt the pps?..given the importance that the CEO gives to his shareholders, think he'll care?...




The answer is obviously NO it wont hurt the PPS.

It has been implied in the past that our CEO only cares about his own wallet, and since he is also the majority share holder. I would say Yes, Kim cares about his shareholders.


all IMO
DD can be very valuable
Lacking it can be costly
Please do your own.
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