Replies to post #30061 on Universal Energy Corp (UVSE)

[eddy2]

I think what investors are missing and not asking them selves is who is the targeted audience for the financials. Not like a private company were there targeted audience is them selves meaning the financials are intended to keep order and help guide the financial future of the company.


In the public sector the public financials are created to sell shares and build up capital.


lets take debt that hold liability. When is it that a creditor would hold liability? Well when they hold a debt of course but have no collateral to back that debt up.



Is this an interest to the targeted audience who are willing put up capital for an adventure, no cause whether the debt has collateral or not it is still a debt unless the creditor is none other then the investor them selves buying the creditors debt so as the company can cancel the debt that they have to pay interest on taking away any kind of income for the company.


So how is it then that there is a growing debt still along with still growing outstanding share base yet a shrinking float?


Well the answer is that you can't purchase debt then expect to still hold the shares so the shares are returned to the company to be resold to the public hence leverage and new liability debt that has no collateral.



What a system until investors stop buying and lenders stop lending but by then there is millions of dollars in revenue created should the shares have been sold for more then the debt but who cares cause she all goes back into the companies coffers that a portion is used for tax.


Now tax that is very interesting how that works cause due too depreciation of assets and being that shares represent assets a well as revenue that is taxable short selling to create more depreciation to offset tax's can be positive for a company as well and positive for it's debt holders/ once the holders of the equity.



So now the company has options to issue more shares to convert the debt back to equity or issue dividends to pay the debt down that puts the tax responsibility back on too the debt holder that is the creditor in this case cause it is a public company not a private company were the targeted audience is the public just like when you make a movie.