Replies to post #48872 on Greenshift Corporation (GERS)

[Harry Winston]

The company's own statement includes a simple relationship between the stock price and the number of new shares that would be added to the outstanding total.

This is the relevant part of that statement.

We have about 30 million shares outstanding. Full conversion of our legacy debt at $0.10 per share would increase our outstanding stock by more than 160 million shares. That amount obviously increases as the price decreases; for example, to 1.6 billion shares at $0.01 per share, 16 billion shares at $0.001 per share, and 160 billion shares at $0.0001 per share.

Notice that the highest price mentioned is $0.10 per share, or 10¢, which has been the current price of the stock since Wednesday. That means that if all the owners of the company's convertible bonds convert those bonds into common stock, there will be an additional 160 million shares and that the total number of outstanding shares will now be 190 million.

However, if the price doubles from here to 20¢, the dilution caused by that new stock would be cut in half. Instead of seeing 30 million outstanding shares increase by 160 million to 190 million, the number of outstanding shares will only increase by 80 million to 110 million.

Using the company's own figures, we can easily see the sharply reduced risk of dilution if the price goes even higher. If the stock price is tripled from the current price to 30¢, the number of new outstanding shares will be only one-third of the 160 million specified in the company statement. The 30 million number will only be increased by a little over 50 million.

The company's statement fails to mention any positive outcome of a stock price that goes higher than 10¢, so again, I wonder why the company doesn't see the positive outcome of the release of their financial documents, starting with the 2016 10-Q.