Replies to post #6946 on SaviCorp (fka SVMI)

[Ex Blockman]

Fls, Another great post.

Let's look at what your second to last paragraph says in relation to making a shrew investment in order to become a millionaire. Let's assume Savi earns $10,000,000 and has 1 billion shares out for discussion purposes. That would equate to .01 EPS. If it were to hold a simple 10 PE we would have a share price of .10. If someone owned 1,000,000 shares, their equity would be $100,000.

Now if Savi were to earn that same $10,000,000 after a 100:1 RS, we would still have the same $10,000,000 in earnings but an EPS of $1.00 because their would only be only 10,000,000 million shares outstanding. Once again, with a simply PE of 10, that would place the share price at $10.00. The shareholder that had the original 1,000,000 in shares now only owns 10,000. $10 times 10,000 shares still equals an equity for that shareholder of $100,000. How is the shareholder being negatively effected as to potential equity, or am I missing something with my simplistic example?

A reverse merger is usually the kiss of death for shareholders. You are absolutely correct that a RS is done solely to increase share price in an effort to attract investors or, more importantly, fianacing based on a higher share price.

The obvious answer is that a RS is acceptable for shareholders IF the company can produce. What I was speaking of earlier is that in most cases a company will not survive a RS, and that is only because the company was close to failing already. Under the right circumstances and conditions, a RS for SaviCorp would be very acceptable if the Cornell situation is remedied prior, and, of course, they can bring the Dynos to market soon.

Have a great weekend.

[flsunchaser]

Mike, Good news. Last night I bumped into somebody I know here in Florida who is a retired stock broker, I asked him if a reverse split would affect convertible preferred stock. He said if the preferred stock is convertible to common shares, yes, the reverse split would affect it. I forgot to ask him about convertible warrants but since then I've found in an internet search this morning that reverse splits extend to convertible warrants. I saw several examples where companies had done a reverse split with their warrants.

I now think this is the way SaVi is gonna get us out of all this potentially toxic dilution that could come from Cornell having 2.9 billion convertible warrants. I don't think the R/S has to be 100:1 either 50:1 or 25:1 would do the job and leave SaVi with a float that would rise in value and attract more investors as positive news comes from Savi Corp. Cornell won't mind either because it's like 6 of 1 or 12 of another, the warrants they have left after the R/S will be worth more just like the stock will be worth more, so what's the difference?

I don't think they'll do this till they're ready to begin production. You'd want to couple good news with the R/S to ensure the stock doesn't go down after the reverse split.

FlSun