Replies to post #129036 on Xechem International Inc. (fka XKEM)

[bigdaddyc25]

AMA, reality is, XKEM is a biotech in its infancy. They will not have any cash to put into a buy-back any time in the next 10 years. They will put all the cash genertated into new drugs and R&D, and FDA apps and growing the business. The truth is, an RS would be required to clean up the share structure, and move us to a higehr exchange. This would be good for us in the long run, but will be very hard in the short term. The timing of an RS is very importnat here. An RS, when there exists a proven history of revenue and earnings growth, will be accepted by the market. An RS before then, will be viewed as a wind up for another round of dilution. I can assure you that I have had this discussion with the compoany several times. They are well aware of the issues surrounding an RS, and will not even entertain the idea of an RS until reveneue and profit growth history is established. For now, we must live with a large O/S. I think we will do just fine as is.

[xyz1002]

AMA- You are right about the perception of R/S. If a R/S is done now it will kill this stock. Timing is of essence. A R/S done at the appropriate time will have positive effect. besides, if XKEM becomes successful as the company promises to be, at some point they have to do a R/S. It will be a required component of a successful financial strategy. I can write various components of the R/S scenario, but suffice to say, it will become essential in future. Also look at the sequence of events I've laid out. If done in that sequence, the stcok will go downa bit after the R/S but wil recover nicely.

Look at PRGX. The stcok was at 0.50+ area, did a R/S 1:10 and the stock went down from $5.80 to I beleive $2.50 area. Its trading now at $15 range.

Buyback is out of question IMO. They will need all the money they generate.

What I've laid out is actually suppose to be strategy to make a company a serious player in the street. They don't have to do anything as long as they make the revenue numbers and the pps will rise too. However, the total value (market cap) of the company is based on its whole structure.

It's kind of scary to post here, I've to tell you. I'm kind of pleasantly surprised that I've not been called a Moron yet.

[xyz1002]

AMA- a word about Buyback. It's not relevant here. But I thought I'll throw this around for those who cares, as most regular investors (I've seen) tend to not see this aspect of a buyback.

For example: Let us say a company has 10 Mil O/S and has net earning of $1M. The the earning per share is 10 cents. Let us say the market is valuing at time "T" with P/E multiple of 20. Then the pps will be $2 and the maket cap at $20M. Let us say the company announce a share buyback of 1M shares. The valuation of the company has not changed, what has changed is the share structure. Theoretically speaking the pps should go up to $2.2222 to give the same market cap of $20M. What if the company issued 1M shares to the management to pocket some money? The share count remained the same so the pps shouldn'y change.

However, in reality when a company simply announces a share buyback the pps goes up significantly. Lot of retail investors don't pay attention to share issued to managment. many many companies take advantage of this reality and do it all the time hding that transcation sahdowed by a share buy back.

Big value companies like Colgate, HP, Deer wouldn't do this kind of trick but many do.

Sorry as its beyond the scope of the discussion here. not necessary.

[FIAT]

Agree completely AMA