Please tell me why the CEO would choose to abandon his R/S cycle? He has a very cheap source of funds with the R/S cycle.
The company can sell stock, many will buy for their own reasons, to raise money for expansions without the worry of default. Regardless of the process-direct or indirect selling of stock or convertible notes-the company has a way of funding ventures and we have no way of stopping the cycle.
What CEO in the world would give up this unlimited supply of funding? His position is sealed at 54% as long as he does not convert his preferred stock and he remains the major stockholder. He can pass any action with no one to stop him.
His concern is not for the shareholders as they will always be there in hope of a run.
The only way to bring down his house of cards is for everyone to stop buying! This will never happen and he knows that!!!
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