After having read the proxy statement in a little more detail, much more slowly, and in a lesser emotional state, I really think we have more reason to have positive expectations for Q1 earnings now than we did before the proxy was published. Here is why:
Proposal 2 to increase authorized shares by 100 million shares has a number of potential reasons as listed in the proxy. The one that garnered the most attention on this board, including by me, was the potential use of these shares as an anti-takeover tool. It is clearly stated in the proxy that it "is not intended to be an anti-takeover measure, shareholders should note that, under certain circumstances, the additional shares of common stock could be used to make any attempt to gain control of our company or our board of directors more difficult or time-consuming. Any of the additional shares of common stock could be privately placed with purchasers who might side with our board of directors in opposing a hostile takeover bid".
It should be noted however that this is not the only need for the additional authorized shares. The shares are needed:
a. "in order that a sufficient number of additional shares of common stock are available for future financing transactions,
b. acquisitions,
c. stock dividends,
d. stock issuances pursuant to employee benefit plans and
e. other appropriate corporate opportunities and purposes.
f. In particular, our ability to issue additional shares of common stock in connection with financing transactions will be critical to raising the capital necessary to maintain our current business plan".
"The board of directors does not intend to issue any shares except on terms that it considers to be in the best interests of the Company and our stockholders."
Longs here have all been solidly behind Steipp and the team that has been in place since August 2010. There is no reason why we should suddenly lose faith and trust in the man just because they are requesting the tools necessary to execute the plan that he has put in place to drive success for this long abused company. Given the limited resources at the companies disposal to attract and compensate valued employees, this is probably the best way to do it and conserve cash.
Yes, there would be a dilution effect if/when they issue the additional shares that are authorized. But does anyone really think that Steipp is going to allow shares to be granted to someone if they do not earn it through performance? That would be totally counter to everything we have seen and heard of the man. The added value from successful execution of the strategy will more than offset the dilution effect on our shares.
I just cannot imagine a man as apparently astute and intelligent as Steipp making this request where he will have to stand before the shareholders to make it one month after Q1 earnings are reported if he is not expecting Q1 earnings to at least meet expectations ... and more likely exceed expectations.
For this reason, my expectations of Q1 earnings are very strong ... and the proxy statement only adds to my positive overall outlook.
Shoot away guys!! haha
AI
