Is there any future value? Has the value of this company been destroyed?
I want to understand what happens long term after the vote.
Nexm_Junkie, I partially agree and partially disagree with your post # 3871.
I understand that this is just a vote to increase the authorized shares (CBAI’s legal limit) from 955 million to 6 billion.
I understood this the first time I read the proxy. That was easy to understand. No one should have had to read the document more than once to understand that aspect.
I got in at $0.002 in late December / early January, and as a current shareholder I am looking at the past actions of CBAI and the future actions of CBAI to make sure that my shareholder wealth is maximized.
I see 4 problems: the speed of issuing shares, future dilution (issuing shares in the future), a long term indicator of the future capital structure, and future stock price.
First, the speed of issuing shares, it took less than 30 days to issue more than 600 million shares.
If you uses the January 12, 2009 Securities Registration Statement (S-1/A) filling, CBAI outstanding shares were increased from 300 million to 955 million. 600 million shares in less than 30 days. I view that as out right shameful and out right mismanagement of capital!!
Second, future dilution (issuing shares in the future), the document clearly states that shares would continue to pour from CBAI. The document listed: raising additional capital for ongoing operations, converting existing debt to equity, business and asset acquisitions, …, present and future employee benefit programs and other corporate purposes.
Anyone who thinks that this increase in shares authorized is just to increase authorized shares is short sighted.
Third, a long term indicator of the future capital structure, this looks like it is heading down the wrong path of permanent penny or sub penny stock status. As nmbr1stckpckr stated in post #3828 and as wise1man stated in post #3826, this looks like CBAI will issue a ton a shares, then management will realize that there are too many shares outstanding (and share price is too low) so they do a reverse stock split.
I have come across many companies with horrible capital structures. I have tended to avoid investing in companies with a history of reverse stop splits, perpetual IPO status, or companies with billions of shares outstanding. CBAI currently has 955 million shares outstanding and has stated it will issue more.
Fourth, what will the future stock price be? Is there a single company with 1 billion or more shares outstanding that trades over 1$?
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