Ecuador,
Yes, this is exactly right. And we are not even close to issuing shares at a p/e of 1 currently. As of now, the return has to be 200%. So even with a 40% net margin, $15M from 30M shares has to generate about $75M in revenue just to maintain eps, if, as I think, the share issuance mounts to marginal cash.
Do you agree that the company has or should have discretion to cut back cap ex when market conditions are unfavorable?
Bear's point, I believe, is that the overall business model is held hostage to the share price, no matter what (unless, of course there are alternative means to raise cash, like the bond offering). We can all agree this is preferable (well, maybe not Sly, who seems to think favorable offerings are somehow dishonest).
So, I am willing to learn how this locked in, non-discretionary stance may be the case, though on the face of it, I don't see why or why it could not change.
Also, I do agree that beyond the most direct and most important eps calculations, there are strategic and almost "network effects" of rapid vertical integration, just not enough to delay the last $15M of development until2014 if need be.
I think that the new Board members are on top of these issues.
Also, having spent some number of hours on bus rides with the company's corporate attorney, I am aware of the importance of Solomon's taking a conservative business and public stance wrt expectations and projections.
