Who owns the shares does not matter when you consider valuation / dilution due to the increase in shares. But increase in ownership by Mr Lenfest is discussed at the bottom of this post. I see several possible scenarios happening:
1) Authorized shares increased to 600 million to facilitate debt conversion and other activities as mentioned in the proxy; yet split does not happen, as per proxy:
"If this proposal is approved, there will be no impact on stockholders until the Board determines to implement the Reverse Stock Split"
Therefore, the Board of Directors proposes that the Certificate of Incorporation be amended to increase the number of authorized shares of Common Stock to 600,000,000 shares in order to be able to consummate the Debt Conversion Agreement as well as for the additional reasons noted herein.
So if split does not happen then you now have the potential for plenty of dilution:
2)If the reverse split does happen then this takes place, from the proxy:
"The Reverse Stock Split would likely increase the number of stockholders who own odd lots (less than 100 shares)."
in My opinion this statement is there for only one reason: Reverse split, odd lots less than 100 will be cashed out. No other reason for it. Then followed by a forward split so shares can be used as previously stated.
3) What I foresee actually happening is Mr Lenfest is positioning himself, just like he did with his cable company, to sell. He's stopped putting money into it, increasing stake of the company to 90+ percent via the debt reduction. Reducing total Authorized shares (if split) to 3 million shares, actual available shares to 600,000. Will now be very easy for him to sell. What that means for current shareholders we'll find out soon enough.
All have a great weekend.
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