redbarron... 50 million dollars means on monday our stock will most likely get hammered. Does anyone have any idea what that means in terms of dilution? I don't care if its for convertible preferred stock (and whatever restrictions it might come with), what it means is that the amount of stock needed to be issued to cover 50 million bucks means, are you ready, approx 10.5 BILLION SHARES TO BE ISSUED !!! That's about 7x our current O/S. Yikes !!!! Now I know why the stock plunged 20% on Thursday.
This might present a buying opportunity since the way I see LOIs are as follows:
1) LOI issued
2) Stock (maybe) jumps for one day
3) Stock plunges for a few weeks because of the expected outcome (in this case dilution)
4) LOI means squat
5) Pick up shares cheaply during plunge
6) Nothing becomes of LOI anyways since all LOIs are mostly baloney
7) Since no dilution because of LOI not happening, stock goes back up.....hopefully.
Even if Ike and his audio values the transactioin at more than 50 million and he's trying to say that would be the value of the combined company, well, we only have a mcap of about 8 mill, so the damage from diluting 42 mill worth of stock would still be catastrophic. Frankly, the LOI for 50 million sounds so far fetched that I'm starting to wonder if anyone even believes in it.
Anyone else know differently, feel free to share
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