Replies to post #59825 on Grupo Resilient International Inc (GRUI)

[Jimmy Quick]

[CaptWhizbang]

"What's the bottom line? Expect somewhere between 5 and 8 billion OS (FULLY DILUTED) with the next FR. The PR I am referring to was misleading (I am being kind) in stating that the OS had been reduced by nearly 900 million shares."

The numbers are acknowledged, but I'm not willing to jump to the conclusions you are making. We know what the OS is and what the reason for it is. The leap to 8 mil OS is a reach at this point. IMO. We have several sales, and a record of buy backs , retirements and such. You can check the HISC web site for the data on that.

That O/S number you post is an abstraction. We can all throw out any numbers about what WILL be, exaggerated or not. It is what it is!

[WardOffMonkey]

Notice you're sticking right with the 100% premium on the swap back to preferred as was done under Moody. Guess you didn't really make a mistake here at all, did you? http://www.investorshub.com/boards/read_msg.asp?message_id=19115418 Your intent all along was to take the worst case scenario from Moody's shenanigans and apply it to the current situation as if it was gospel, while all along it's just conjecture and hyperbole. Pure, unadulterated FUD. We'll see what the actual numbers on the various classes of stock are when the 1st quarter financials are released. Until then anything posted is just a SWAG at best and plain crap otherwise.

[WardOffMonkey]

Okay Leo, I've reread you're post. I still stand by my comments on the premium for swap from common back to preferred, as we just don't know if there was a premium or what it was if there was one. You are correct that the swap to preferred effected while Moody was at the helm had a 100% premium, but we have no indication that is the case this time. We can only wait until we see the financials to discern how the swap was handled.

As for your other arguments regarding dilution, I think you are combining apples and oranges. While you are correct that Earnings Per Share is generally reported on a fully diluted basis, you are absolutely incorrect that Market Capitalization is also calculated on a fully diluted basis. Market Cap is based upon the outstanding shares of the trading class in question times the current market price. Outstanding shares is for that class only and does not consider dilution. A good example to look at is Northrop Grumman(NOC).

At 3/31/07 NOC had income available to common shareholders from continuing operations of $393 million. NOC had weighted average shares of all classes of Common before Series B Preferred dilution of 351.9 million shares. Dilution from Series B Preferred was the equivalent of 6.4 million shares of Common, which results in weighted average diluted shares outstanding of 358.3 million shares. This results in a reported diluted earnings per share of $1.10 ... ($393/358.3sh) for the quarter.

Let's take a look at Market Capitalization however. Current market cap is $25.2 billion based on a current market price for Common shares of right at $73.06/sh and Outstanding Shares Common of 345.1 million shares. This is the current O/S for Common before the dilutive effects of the Series B Preferred, not after. The 345.1 million Common O/S is slightly smaller than the end of the 1st quarter due to Northrop Grumman's share repurchase program, which had $1.2 billion authorized at 12/31/06 with 345.9 million Common shares outstanding at 12/31/06.

Your argument regarding the dilutive effects of the preferred stock on the market capitalization does not hold water. If you are basing your market price for Common on some multiple of the EPS(fully diluted), then there is a very slight amount of support for your argument that this would affect market cap. For HISC at 12/31/06 there were 200,000 shares of Series C Preferred outstanding which convert to Common on a 1 to 1 basis but at a 20% discount to Common's current PPS, so I'll count that as 1.2 to 1. That would add a total of 240,000 shares to the Fully Diluted Shares Outstanding, really a drop in the bucket, which would have a negligible effect on the EPS. If you applied the 1.2 to 1 conversion rate to the 826,000,000 swapped to Preferred, that would get you an additional 991.2 million Common shares, only a net increase(dilution) to Common shares of 165.2 million shares. Sure this is a lot larger than the 240,000 shares we calculated for 12/31/06, but at 4.2 billion pre-conversion to 5.1 billion post-conversion, it is only somewhere between 3.9% and 3.2% of total shares, so discount your current PPS to 97% and your done. What say you?

btw, you can look up any of the info on Northrup Grumman here if you want to verify the figures I used: http://investor.northropgrumman.com/phoenix.zhtml?c=112386&p=irol-irhome

[stockperformer]

IN float 4 plus billion, they can issued up to 10 billion. Since they removed 800 plus million, I do not think they will issue anymore. Instead, a reverse split if any.