I am glad that WDDD is considering BOTH an increase in the A/S as well as a R/S.
I know that the market in general reacts to announcements of R/S's the way patients react when their doctors tell them they need to perform an anal probe, but this is because most of the time, a R/S is a last ditch effort by a company that is on its last breaths of life, and a R/S is a desperate attempt to stay solvent. In essence, it is not the R/S by itself but what the R/S reflects about the condition of the company.
In this case, it is clear that this is NOT the case with WDDD. It actually mirrors what MARA is doing in that both companies are just entering critical stages in their development, and Mgmt, along w/the BOD, have astutely laid out a roadmap to future success for which a R/S serves a strategic purpose.
I liken the anticipatory nature of this corporate action requesting the authorization for the R/S to a chess game, where a skilled chess master is capable of planning his moves 20 steps in advance. WDDD has identified one of the end-game objectives that it seeks and is positioning itself and getting all their ducks in order strategically in order to maximize their ability to achieve their objective on their own timing and be in a position to be nimble enough to react in a timely manner when the time is right to do so.
WDDD is clearly telegraphing its confidence in not only a favorable Markman opinion, but also a favorable resolution to the ATVI case in its totality. As an investor, I have no visibility to any more details now than I did when the complaint was initially filed, but it is always bullish to see company mgmt make moves that exude confidence.
IMO, WDDD is jockeying to graduate from the minor leagues to the major leagues upon favorable resolution to the ATVI case. This includes an uplisting to a major exchange. And this is where the ability to do a R/S becomes handy. And I like the fact that WDDD is astute enough to consider this in tandem with an increase in the A/S. This is something MARA didn't do but I wish they did, and I am glad WDDD is doing this. Doing a R/S decreases the number of shares, both authorized and outstanding. As a public company, if you are angling for an uplisting, this means you want larger investors. Larger investors despise illiquid stocks. Large investors like large floats so that they can make buys/sells of large blocks easily and without fear of disrupting the market for the stock. Increasing the number of A/S will offset some of the impact that the decrease in shares from a R/S would bring about.
It is my opinion (and my opinion only) that upon a favorable resolution to the ATVI case (not just a favorable Markman opinion, but an overall resolution -- and I am not opining on how long this will take as litigation is always unpredictable), WDDD's sp should be high enough where it should not need a R/S of more than 1:2 in order to not only get uplisted, but to get comfortably over the $5 level where many broad-based fund families will also be permitted to buy its stock.
Considering that WDDD's entire future lies in this patent, an unfavorable Markman will be the deathknell for WDDD and a R/S of even 1:20 will not help it survive. As such, the non-sensical nature of how a R/S will be useless to WDDD in the only other scenario in this upcoming binary event further leads me to believe that the request for authorization of both the R/S and the increase in the A/S are designed with future growth in mind. And as a shareholder, I applaud this move.
