What do you think of these calculations?
The following are two posts by the same person in the Yahoo group regarding the dilution and what he believes is fair valuation:
Date: Thu Feb 2, 2006 12:25 pm
Subject: Go figure-folks, stock trading below dilution price
If all shares awarded were exercised so that the 3.1B shares are all tradable, company would get another $9M. Add that to the $6M in cash and we have a net add of $15M to the compnay in exchange for additional 1.9B shares. The company had essentially no cash when we had an oustanding 1.2B shares.
Divide the $15M by 1.9B shares and each share brings in 0.0079 to the company. We are trading at below 0.007 folks - this is crazy and will not last.
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Date: Thu Feb 2, 2006 1:13 pm
Subject: JF not crazy after all goodboymaximus
Some thought he was giving away the store for nothing but a closer look shows he got all the cash at about 0.008 per share. And these folks put up all the cash needed to go forward, so they got it at a discount. If you figure the number of shares they have and a fair return for their investment, the stock would have to trade at least 3-4X what they purchased to sustain any sort of meaningful selling from them. So when they paid 0.008 per share, they are realistically expecting the stock to go to 0.024 to 0.032 in short order.
Anyway, regarding the current PPS, I have not heard or seen any stock where it trades at a discount to the secondary placement price. I guess only in the crazy world of pennies, but in the end, I think logic will prevail. We should be trading at least 0.01, a 25% premium to the secondary price of 0.008.
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