Let's say that 20M shares are in the hands of 15 or less people.
Heritage has 7M or so and with SK owning 3M or so that leaves 10M shares in 13 people's hands (probably less).
So let's round down and say there is 40M shares that trade freely.
How long would it take for an "outsider" to seize control of this company?
At ten cents based on outstanding we are a 6.4M dollar company.
For 6.4M we will generate 4M or so in revenue in Q4. Initially there will be little free cash flow but that will change.
If I was worth 40M dollars I would sit on the bid all day to try and acquire enough shares to seize control.
Cannot happen right? Sure it can. If you are wise to the way markets work, you simply create an off-shore fund that sells phantom shares into the market. Create an artificial price, stir up some panic in the stock to create more volume and in a matter of months you are growing the stockpile of shares quite nicely. Then you simply start a proxy fight and see where the chips fall.
Bottom line is you then become a huge pain in the butt to management and the board. They either acquiesce to your desires or things get very nasty and you get bought out higher or you bring in another firm to buy up more or offer the company more for what is left.
It is a very dangerous game that management is playing right now. For if things are as good as they seem it would take little to execute the aforementioned strategy.
If I had 20M and my DD suggested that SK was right. The company would be mine.
Noront Resources is facing this exact dilemma TODAY. It happens. It is called stealing.
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