Shocking math forecast for current longs and potential investors:
It's been said by people on this board that UBRG is waiting for great news is ready to conduct a 1000:1 reverse split. A reverse split takes all existing shares counts and divides them by the split ratio while multiplying the share price by the same proportionate amount.
Example: currently UBRG has 3 billion shares. A R/S of 1000:1 would bring the total shares to 3 million.
If a R/S occurred tomorrow before the open the stock price would be $1.50. If you had 1 million shares tonight, you'd have 1000 shares at the open tomorrow.
According to UBRG's latest 10Q (Filed after a NT (not timely) filing on May 27th, 2013) the company has 3.5 million in debt.
At current pricing and post an immediate R/S the company could issue roughly 3 million shares/notes/warrants with a conversion discount of 33% ($1.00) and completely eliminate balance sheet debt.
This issuance would represent a 50% dilution (3 million existing shares + 3 million convertible notes/warrants/units (units are combinations of shares, notes, or warrants).
So... The stock closed at $0.0015 and after the post split dilutive issuance the pre split price would equal a pre-split price of $0.00075 and a post split price of $0.75.
They'd have zero balance sheet debt and half a chance of applying previous debt costs towards net revenue and generating a profit per share.
If they'd done the R/S over a month ago, the post split price would have been $3.80. There would still be 3 million shares BUT they'd have only needed to issue 1 million shares with a < 7.5% discount on the notes/warrants/shares (3.80-3.52 = $0.28. $0.28 = 7.34% of $3.80).
So they'd have seen a 33% dilution post split price of $2.55 or a pre-split adjusted price of $0.0010. and zero balance sheet debt.
Now... Assuming that Ali, Guest, and Martinez are in fact adhering to their fiduciary responsibility to shareholders WHICH scenario is better for shareholders?
What about a scenario where the reverse split ration COULD HAVE BEEN LOWER, leaving shareholders more shares AND still paying off balance sheet debt ?
So.... Those of you thinking "they're waiting for great news to support the stock post a split"? Great news would be zero debt... And I don't know about you but if I had shares I'd prefer to have that kind of news with as many shares as possible and as high a share price as possible.
Last math: if you bought this stock at $0.015? Post split @$0.0038 scenario you'd need roughly 500% gain on the stock to break even ($12.75 per share).
For those of you who bought at $0.015 or higher at today's price and R/S ratio you'd need to see AT LEAST a 1300% return post split adjust price of $20.15.
Which of those scenarios seems best for the shareholder? Still think Ali, Guest, Solomon have your best interests as shareholders at heart? Or are you seeing the light and really starting to see that they don't care about you. They care about issuing shares to make their $174,000 per year salaries and NOTHING ELSE.
(Note: all scenarios are split (minus) hypothetical issuance valuations (minus) hypothetical best case scenario discounts (multiplied by) .0015 (minus pre-split adjustment of 50% or pre split adjustment of 33% depending on scenario)
