My opinion differs from yours, Whizz. Any company that hopes to be more than a flash in the pan---i.e., wants to build and grow for the long term---needs a lot of shares outstanding. Actually, what it needs is a large float. Institutions will not invest in companies that have small floats. Of course, institutions also will not invest in OTC BB companies. So first things first, I suppose.
There are companies out there with huge amounts of shares outstanding that are no more than stock manipulating and stock issuing machines. CBQI is not one of these. Everything I have seen over the last nine months leads me to believe that this company and its leadership are on the up and up and want to grow a company that generates shareholder wealth based upon revenue and profits.
I would agree with you that there is too much stock out there from one standpoint: I wish that some of the deals in CBQI's past had not been done. They may have contributed to a higher share price for the short-term, but they did not create a viable, sustainable business model that CBQI was able to capitalize on. Time has told us that these shares were misspent.
That said, I do not think there are too many shares outstanding. CBQI is on a growth path right now that, if sustained, will lead it to a revenue level that can easily support 78 million shares outstanding at a per-share price that is much higher than the current 25-cent level. In fact, I would like to see CBQ continue to use its shares to fund acquisitions of the sort recently concluded if they can be done at such an attractive price.
Before CBQI concluded its recent deals, we were told that the average run rate was $15 million. Now the average run rate is $27 million. That's a $12 million gain at a cost of 10 million shares. (There were 66.7 million shares outstanding at the end of 2000. There were 76.7 million shares outstanding as of April 13.) In short, CBQI used shares valued at roughly 20 cents a share to raise its average annual run rate $1.20 per share this year. I call that one helluva bang for the buck, because that is a 600% return...and that's only in the first year. If CBQI doesn't screw up, they should have an equal or even-better run rate in succeeding years.
In fact, I wish they could make ten deals like that. Share dilution, share shmilution! Any deal that nets a sustainable 600% ROI in one year is a good deal.
Now, I'm assuming that the 10 million share increase covered the EasySoft acquisition. I may be wrong about that, but I remember the initial announcement of the EasySoft acquisition stating that it was a non-dilutive purchase. (Gary, is this still true?)
