Saturday, July 23, 2005 11:06:08 AM
Chisox - you seem to continue to miss the difference between AUTHORIZED and ISSUED and OUTSTANDING. The latter is the key.
I am concerned about the shares being issued, not concerned if they are never issued. The latter, which appears to be the current case, is a non-event with respect to the share price.
If they issue the shares, restrict them, and retire common, the float will go down. All things being equal, this would add pressure on the price to go up.
Longer term, the shares would be converted, after the restrictions expire, into 10 x shares and that would cause pressure on the stock to go down longer term.
I'd be willing to buy preferreds that are restricted for 1/10 of the price of common. Unless it is available to the public, though, long term I think it would be a negative for the company.
So, Chisox, it was a good discovery on your part, but you are hurting the discussion with mix and match termininology.
Right now, there should be no affect on the stock as apparently none or few shares have been issued.
Short term, it would cut the float and cause the price to rise.
Long term, after the 2 years are up, it would increase the float and cause the price to decline.
Again, I am assuming everything else to be equal, and this would be one factor in the valuation equation, albeit a fairly large factor.
I would suggest to the company that they clarify that the preferreds are NOT being issued now, except in very limited amounts, and that they will be, in fact, restricted for 2 years when issued. I don't believe the Florida filing provided for the restriction but I may have missed that.
The reason that I would suggest the company clarify this is that this is exactly the type of fodder that a basher, professional or amateur, will munch on and create FUD, Fear, Uncertainty and Doubt.
I always prefer to have ALL the information to prevent Mr. FUD from stealing shares from weak hands.
I am concerned about the shares being issued, not concerned if they are never issued. The latter, which appears to be the current case, is a non-event with respect to the share price.
If they issue the shares, restrict them, and retire common, the float will go down. All things being equal, this would add pressure on the price to go up.
Longer term, the shares would be converted, after the restrictions expire, into 10 x shares and that would cause pressure on the stock to go down longer term.
I'd be willing to buy preferreds that are restricted for 1/10 of the price of common. Unless it is available to the public, though, long term I think it would be a negative for the company.
So, Chisox, it was a good discovery on your part, but you are hurting the discussion with mix and match termininology.
Right now, there should be no affect on the stock as apparently none or few shares have been issued.
Short term, it would cut the float and cause the price to rise.
Long term, after the 2 years are up, it would increase the float and cause the price to decline.
Again, I am assuming everything else to be equal, and this would be one factor in the valuation equation, albeit a fairly large factor.
I would suggest to the company that they clarify that the preferreds are NOT being issued now, except in very limited amounts, and that they will be, in fact, restricted for 2 years when issued. I don't believe the Florida filing provided for the restriction but I may have missed that.
The reason that I would suggest the company clarify this is that this is exactly the type of fodder that a basher, professional or amateur, will munch on and create FUD, Fear, Uncertainty and Doubt.
I always prefer to have ALL the information to prevent Mr. FUD from stealing shares from weak hands.
