Replies to post #122097 on Spongetech Delivery Systems Inc (fka SPNGQ)

[weeblewobble09]

Yeah, but the stock price was much lower when they last increased the AS. So the stock was still undervalued. But at these higher prices it's a bit riskier. And still, why are they increasing the A/S? Until the ungag the T/A it's going to hold back the stock. And I wouldn't want to own when the 8K is released.

[sepisays]

I would add that this has been the reason for the fact that they carry no debt. As a hedge, the increased A/S could lead to increased O/S if, and I would assume only if, they were in a position where they needed to raise capitol to meet A/R needs.
But if sales are strong and cashflow is available, there would be no perceiveable reason to have to do that.
The recent increase was also directly related to the NASDAQ listing in that once the application had been filed they would be barred from increasing the A/S or O/S as the paperwork filed needs to be representative of the company at the time of submittal. In other words, they are restricted from making any changes after the submittal.
So, if you needed to be prepared for that hedge, this was how they could do it. Nothing devious about that.