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Re: Lawson Digest post# 946

Wednesday, 07/18/2012 8:10:10 AM

Wednesday, July 18, 2012 8:10:10 AM

Post# of 2065
This, and your prior analysis of the SKNY new financing, are two of the best posts I've seen on this board. Thanks!

Let me add some additional caveats.

SKNY's market cap, that is the value of the entire company on a per-share basis, is about $6 million. The company has a large debt load and loses millions each year, with no sign of profitability on the horizon.
Is it likely that given that, someone will come along and give them $15 million?
Now before anyone accuses me of calling the company liars, let me be clear - the deal COULD provide $15 million, but IMHO, it won't for the reasons above.

The only completed portion of the financing is $1 million, "The Unit Financing is structured to occur in three separate closings, with each of the second and third closings subject to certain conditions." Everything else is up in the air.
http://www.sec.gov/Archives/edgar/data/1176325/000114420412038308/v317639_8k.htm

The new financing is very complex, but I'd suggest anyone thinking about making a substantial investment read it carefully - http://www.sec.gov/Archives/edgar/data/1176325/000114420412038308/0001144204-12-038308-index.htm

As you pointed out, the sorts of individuals who provide capital to a company with SKNY's balance sheet and financial history don't do so without ensuring they will profit from the deal, whether SKNY and it's other shareholders do, or not. As with any investment, I doubt it's possible to guarantee a return for Trim Capital, but you can be sure they'll make sure it's very, very likely. And if anyone thinks that after their gains, the remaining shareholders will also gain, and gain substantially, then all I can say is "Best of luck with that".

"The world is a dangerous place, not because of those who do evil, but because of those who look on and do nothing."
-- Albert Einstein

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