Why suspend critical thinking on the preeminent issue for the company in the coming year?
Ecuador has done the basic dilution math. It's not just "6 of one. hslf dozen of the other." The dilution diminishes eps in a big way, at these share prices. And Bear has offered the most plausible reasons for the dilution.
The main point to me is whether or not the marginal cap ex -- the last portion received from share issuance -- is within the company's discretion to go forward only when the return is favorable or not, given at least a year's lead time.
What hangs in the balance, pretty much, imo, is the share price over the coming year. We've already seen what 30M shares overhang does.
This is why I think the company needs to do a much better job explaining how and why 2013 should be greatly improved on that front:
1) FN and acceptance in Sweden may boost price. A doubling in price would cut the number of new shares in half. This is something that full fledged IR would have means to do -- through the press, analysts, road shows, a Swedish rep. (so, hopefully, this part is coming)
2) A bond deal. If the cost of capital is interest and some warrants, the Ecuador math goes out the window, and so does most of the over hang problem. This wold be a huge win, even if it were some kind of hybrid deal. (so, hopefully, this part is coming)
3) There are ways to reduce cap ex, or increase discretionary cash, such that less shares need to be issued in 2013. What shareholder would rather see 30 restaurants and 130M shares eoy 2013 vs 10 restaurants and 100M shares? Or a one year delay "greenhousing" the remaining HU acreage? Or building a new fish farm without the equity buy back? Etc.
If these things would not eliminate the need to issue shares, if the company's JV deals create commitments for 120% of its cash income producing potential across all lines, regardless of the possibilities above for instance, I'd just like to know how and why.
