RNVA opinion
That's correct. The CEO doesn't own the company he started. But now he controls what he has built. And he gained this control by investing a 1/4 mil $ into his company. While reducing the balance sheets debit.
I say do what the big guys do!
This type of action is seen very often. With an increase in institutional investment, many management teams loose control of their own company. Buy giving oneself a controlling voting power. (Known as a poison pill) the individual which built the company, can maintain control, as growth plans continue.
Also if shareholder want continued growth there is only one way for a startup to attain it. Selling stock. If the authorized has little to no room to sell stock. the company can NOT grow. One should want share restructuring! And one should want that restructuring to be in the form of a reverse split vs. increase of authorized. Because a reverse split maintains shareholder value !!!
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